PSC in Uganda hits Shs 25.43trn in January 2026-report
The report, released by the Finance ministry, attributes the growth in mainly to shilling-denominated credit, which increased to Shs 17.82trn in January 2026, from Shs 17.71trn in December 2025
KAMPALA, March 25, 2026 — The stock of outstanding private sector credit [ PSC ] in Uganda edged up by 0.3 percent to Shs 25.43 trillion in January 2026, from Shs 25.35trn in December 2025, according to the Performance of the Economy Monthly Report February 2026.
The report, released by the Finance ministry, attributes the growth in mainly to shilling-denominated credit, which increased to Shs 17.82trn in January 2026, from Shs 17.71trn in December 2025.
However, the 0.3 percent expansion was slower than the 1.3 percent growth recorded in December 2025, reflecting weaker demand for credit following the festive season.
On a year-on-year basis, PSC growth remained unchanged at 0.3 percent, pointing to subdued credit expansion at the start of the year.
“Foreign-currency denominated credit declined in January 2026 to Shs 7,608.97 billion from Shs 7,641.29 billion in December 2025, mainly on account of a reduction in foreign currency deposits,” the report states.
Credit extensions
The report shows that credit approved for disbursement in January 2026 amounted to Shs 1.11trn out of total loan applications valued at Shs 2.84trn, translating into an approval rate of 39.2 percent.
This was significantly lower than the 73.0 percent approval rate recorded in December 2025, partly due to reduced lending to sectors such as trade, manufacturing and agriculture, as banks adopted a more cautious stance during the election period, particularly on contracts and projects in relatively riskier sectors.
“Despite the decline, the personal and household Loans sector continued to account for the largest share of approved credit in January 2026, receiving 41.4 percent of the total, up from 23.8 percent in December 2025. This was followed by building, construction and real estate [15.2 percent], Trade [13.2 percent], Business, Community, Social and Other Services [11.0 percent], and Agriculture [9.0 percent].”
Lending rates
The average weighted lending rate for shilling-denominated credit rose to 18.33 percent in January 2026, from 18.00 percent in December 2025.
“The increase in lending rates for shilling-denominated credit was partly due to higher risk associated with new borrowers, particularly in the agriculture sector, prompting commercial banks to charge slightly higher interest rates,” the report states.
By contrast, the weighted average lending rate on foreign currency-denominated credit declined slightly to 7.21 percent in January 2026, from 7.32 percent in December 2025.
Government securities
According to the report, government raised Shs 1.61trn in February 2026 from two treasury bill [T-Bill] auctions and one treasury bond [T-Bond] auction.
“Of the total amount, Shs 615.98 billion was raised from T-Bills, while Shs 997.19 billion came from T-Bonds. A total of Shs 853.19 billion was used to finance items in the budget, while Shs 759.98 billion was used to refinance maturing securities,” the report states.
https://thecooperator.news/private-sector-credit-growth-remains-flat-as-lending-rates-rise-report/
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