Uganda: Outstanding private sector credit edges up in May 2026
KAMPALA, July 22, 2026 — The stock of outstanding private sector credit in Uganda increased by 1.1 percent to Shs 26.72 trillion in May 2026, up from Shs 26,43trn in April 2026.
According to the latest Performance of the Economy Monthly Report June 2026, the growth was largely driven by increased loan disbursements to firms in the manufacturing and trade sectors, supported by a reduction in average weighted lending rates.
“During the month, both shilling-denominated and foreign currency-denominated private sector credit recorded growth of 0.6 percent and 2.2 percent, respectively,” states the report released by the Ministry of Finance Planning and Economic Development [MPFED.
Shilling-denominated credit increased to Shs 18.55trn from Shs 18.45trn in April 2026, while foreign currency-denominated credit rose to the equivalent of Shs 8.16trn from the equivalent of Shs 7.99trn in April 2026.
The report states personal and household loans continued to account for the largest share of outstanding private sector credit at 25.8 percent, followed by building, mortgage, construction and real estate [18.4 percent], trade [14.3 percent], manufacturing [12.6 percent], and agriculture [11.3 percent].
Credit extensions
Credit approved for extension to the private sector increased to Shs 2.29trn in May 2026 from Shs 2.05trn in April 2026.
During May 2026, the loan approval rate stood at 73.8 percent of total loan applications amounting to Shs 3.104.63trn. The increase in approved credit was largely driven by higher lending to the trade, manufacturing and agriculture sectors, reflecting improved economic activity.
Personal and household loans accounted for the largest share of approved credit at 30.4 percent, followed by trade at 28.3 percent. Building, construction and real estate accounted for 13.0 percent of approved credit, while agriculture accounted for 11.1 percent.
Lending rates
According to the report, in May 2026, the average weighted lending rates declined for both shilling-denominated and foreign currency-denominated credit.
“Lending rates on shilling-denominated credit fell from 18.26 percent in April to 18.00 percent in May 2026, partly due to lower risk premiums on shilling loans, supported by stable inflation and adequate liquidity in the banking sector,” states the report.
On the other hand, the report shows the average weighted lending rates on foreign currency-denominated credit declined marginally from 7.34 percent to 7.28 percent over the same period, partly due to exchange rate stability and a positive macroeconomic outlook.
https://thecooperator.news/ugandas-outstanding-psc-jumps-1-8-percent-in-april-2026/
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