Uganda: Lending rates rise to 18.73 percent in February 2026
Credit approved by lenders for extension to the private sector increased significantly to Shs 1.74 trillion in February 2026, compared to Shs 1.1 trillion billion in January 2026
KAMPALA, April 23, 2026 — Uganda’s weighted average lending rates in February 2026, reflected divergent movements between shilling-denominated and foreign currency-denominated credit. While shilling lending rates recorded a marginal increase, foreign currency lending rates continued their downward trajectory.
The weighted average lending rate on shilling-denominated credit rose to 18.73 percent in February 2026, up from 18.33 percent in January 2026, according to the Performance of the Economy Monthly Report [March 2026] with The Ministry of Finance, Planning and Economic Development [MFPED] noting that over recent months, shilling lending rates had remained relatively stable, supported by lower non-performing loans and improved macroeconomic conditions.
In contrast, the weighted average lending rate on foreign currency-denominated credit declined to 7.09 percent in February 2026, from 7.21 percent in January 2026.
Interest rate movements
In March 2026, the Central Bank Rate [CBR] remained unchanged at 9.75 percent, a level maintained since October 2024. The sustained monetary policy stance reflects the Bank of Uganda’s continued focus on price stability while supporting broader macroeconomic stability and economic growth.
Outstanding private sector credit
The outstanding private sector credit declined marginally by 0.2 percent to Shs 25,377.04 billion in February 2026, from Shs 25,427.94 billion in January 2026. The decline was driven by a contraction in foreign currency-denominated credit, partially offset by slight growth in shilling-denominated lending.
Foreign currency-denominated credit fell by 0.8 percent to Shs 7,549.9 billion, from Shs 7,609.0 billion in January 2026. Over the same period, shilling-denominated credit recorded marginal growth of 0.05 percent, rising to Shs 17,827.2 billion from Shs 17,819.0 billion.
At a sectoral level, the contraction in credit stock was mainly observed in agriculture, trade, and the building, mortgage, construction and real estate sectors. This trend is partly attributed to improved borrower repayment capacity, reflected in a declining ratio of non-performing loans during the first two quarters of the financial year, as businesses benefit from stronger economic activity.
Credit extensions
Credit approved by lenders for extension to the private sector increased significantly to Shs 1.74 trillion in February 2026, compared to Shs 1.1 trillion billion in January 2026. The increase was largely driven by higher lending to business, community, social and other services, as well as the trade and manufacturing sectors.
Sectoral distribution shows that personal and household loans accounted for the largest share of approved credit at 30.1 percent. This was followed by trade at 19.9 percent and business services at 17.6 percent.
https://thecooperator.news/stanbic-lending-to-saccos-hits-shs-289bn-as-inclusion-drive-deepens/
Buy your copy of thecooperator magazine from one of our country-wide vending points or an e-copy on emag.thecooperator.news
