KAMPALA, February 21, 2026 — The stock of outstanding Private Sector Credit [PSC] recorded in Uganda increased by 1.3 percent to about Shs 25.3 trillion in December 2025, up from Shs 25.025 trillion in November 2025, according to the latest Performance of the Economy Monthly Report released by the Ministry of Finance, Planning and Economic Development.
PSC refers to the financial resources [loans, bonds, trade credits] provided by banks and non-bank financial institutions to private businesses and households. It serves as a vital source of funding, particularly for small and medium-sized enterprises, offering customised and flexible financing outside the traditional public bond markets.
The expansion in December 2025 was largely driven by foreign-currency-denominated credit, which increased from Shs 7.3 trillion to Shs 7.6 trillion over the period. “This growth was due to the easing of foreign-currency lending rates, underpinned by higher foreign-currency deposits in commercial banks,” the report states.
By contrast, shilling-denominated credit remained broadly stable, edging down marginally from Shs 17.706 trillion in November 2025 to Shs 17.705 trillion in December 2025.
Credit extensions
Credit approved for disbursement in December 2025 amounted to about Shs 1.856 trillion, out of total loan applications worth Shs 2.54 trillion. “This translated into an approval rate of 73.0 percent, up from 59.7 percent in November 2025 and slightly above the 72.7 percent recorded in the same month the previous year,” the report notes.
According to the report, the month-on-month improvement was mainly driven by increased lending to key sectors, including manufacturing, transport and communication, and agriculture.
Personal & household loans accounted for the largest share of credit disbursements, taking up 23.8 percent [Shs 441.2 billion] of total approvals in December 2025. Of this, Shs 165.0 billion was electronic credit [mobile money loans].
Other major recipients of credit included manufacturing at 18.3 percent [Shs 338.7 billion], trade at 18.1 percent [Shs 335.4 billion], building, mortgage, construction & real estate at 12.2 percent [Shs 226.7 billion], business, community, social & other services at 11.1 percent [Shs 206.9 billion], and agriculture at 9.5 percent [Shs 176.9 billion].
Commercial lending rates decline
The report further indicates that the weighted average lending rate on shilling-denominated credit declined from 18.43 percent in November 2025 to 18.0 percent in December 2025. “This reduction was mainly driven by lower risk aversion among lenders due to a decline in the ratio of non-performing loans (NPLs) to total gross loans over the period,” it states.
Similarly, the weighted average lending rate on foreign-currency-denominated credit fell from 8.33 percent in November 2025 to 7.32 percent in December 2025. “This decline was partly attributed to higher foreign-currency deposits, following increased foreign exchange inflows from exports, foreign direct investment, and remittances, which boosted the supply of foreign currency in the banking system,” the report says.
“The stability of the shilling against the US dollar in December 2025 also contributed to the reduction in the rates,” it adds.
The CBR remains unchanged
The Bank of Uganda kept the central bank rate [CBR] unchanged at 9.75 percent in January 2026, marking the sixteenth consecutive month at this level [since October 2024]. The rate was deemed appropriate to ensure that inflation stabilises at the 5 percent policy target over the medium to long term.
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