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August 19, 2026Journal of Financial Economic Policy

Who holds, who harms? The effect of creditor composition on Tanzania’s financial stability

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Authors

EMEnock MwakalilaSMSeif Muba

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Overview

Econometric analysis reveals creditor identity distinctly influences financial stability, indicating that commercial bank holdings improve long-term resilience while external debt increases...

Key Points

  • To evaluate the long-run and short-run impacts of public debt composition across different creditor classes on national financial stability.
  • Analyzed quarterly macroeconomic and debt data from Tanzania using an autoregressive distributed lag (ARDL) model.
  • Tracked debt shares held by the central bank, commercial banks, pension funds, and external creditors against the capital adequacy ratio, adjusting for GDP growth, inflation, interest rates, and foreign exchange reserves.
  • Commercial bank debt holdings demonstrate a significant positive long-term association with financial stability, whereas central bank and external debt holdings significantly elevate financial vulnerability.
  • Pension fund holdings exhibit no significant long-run effect on stability, while short-term commercial debt surges and foreign reserve declines temporarily undermine financial health.

Cite This Study

Mwakalila et al. (2026) studied this question.

synapsesocial.com/papers/6a85637603308d306e2d6a3ehttps://doi.org/10.1108/jfep-10-2025-0434
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1Public debt sustainability in Tanzania: a non-linear analysis of fiscal and monetary policy interactions2025
  2. 2Does fiscal policy amplify or mitigate debt vulnerabilities? Evidence from Tanzania's government revenue and expenditure dynamics2026
  3. 3The Relationship Between Public Debt and Economic Growth in Tanzania2024 · 4 citations
  4. 4Effects of Government Debt on Monetary Policy Strategy in Tanzani2024
  5. 5Does Debt Hamper Economic Growth? A Time Series Analysis for Tanzania (1990 – 2023)2025