KAMPALA, November 23, 2025 — Commercial lending rates in Uganda eased slightly in September 2025, according to the Performance of the Economy Monthly Report for October 2025.
The weighted average lending rate for shilling-denominated credit edged down to 18.45 percent in September 2025 from 18.46 percent in August 2025.
Meanwhile, the weighted average lending rate for foreign currency-denominated credit fell more noticeably, to 8.15 percent in September 2025, from 8.34 percent the previous month.
“Interest rates remained relatively stable on account of low and stable inflation, the Bank of Uganda’s decision to maintain the Central Bank Rate [CBR] at the same level as the previous month, and reduced risk as shown by the decline in the ratio of non-performing loans to total gross loans,” the report notes.
The report adds that the Bank of Uganda kept the CBR unchanged at 9.75 per cent in October 2025, marking the thirteenth consecutive month at this level. “This rate was considered appropriate to sustain price stability and anchor inflation around the 5 per cent target while supporting economic growth and socio-economic transformation,” it states.
Outstanding private sector credit
According to the report, the stock of outstanding private sector credit grew by 1.0 percent to Shs 24.29trn in September 2025, up from Shs 24.05trn in August.
“This increase was observed in both shilling- and foreign currency-denominated credit, which rose from Shs 17,417.05 billion and Shs 6,631.18 billion in August 2025 to Shs 17,481.48 billion and Shs 6,805.94 billion respectively in September 2025,” the report says. It attributes the growth mainly to stronger demand for credit driven by improved economic activity and recent reductions in lending rates.
Credit extensions
In September 2025, credit approved for disbursement amounted to Shs 2.12trn, out of total loan applications worth Shs 2.8trn. “This represents an approval rate of 75.5 per cent, up from 61.8 per cent in August 2025, when loan applications totalled Shs 2,874.4 billion and Shs 1,777.5 billion was approved for disbursement,” the report states.
The improved performance is largely attributed to increased lending to manufacturing, trade, and the building, mortgage, construction and real estate sectors, all key drivers of economic growth.
As in the previous month, Personal and Household Loans accounted for the largest share of credit disbursements, representing 25.6 per cent [Shs 544.05bln] of total approved credit in September 2025.
Other major recipients included Trade at 23.0 per cent [Shs 487.92bln], Manufacturing at 13.0 percent [Shs 276.25bln, Business, Community, Social and Other Services at 10.6 percent (Shs 223.89bln], Building, Mortgage, Construction and Real Estate at 10.5 percent [Shs 222.29bln], and Agriculture at 9.6 per cent [Shs 204.56bln].
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