Uganda: Outstanding private sector credit improves slightly in March 2026

KAMPALA, May 28, 2026 — The stock of outstanding Private Sector Credit [PSC] in Uganda increased by 2.3 percent, rising from Shs 25.377 trillion in February 2026 to Shs 25.965trn in March 2026, according to the Performance of the Economy Monthly Report for April 2026.

The report, released by the Ministry of Finance Planning and Economic Development [MOFPED], states that the growth in PSC was recorded in both shilling-denominated and foreign currency-denominated credit.

Shilling-denominated credit rose from Shs 17.827trn to Shs 18.204trn, while foreign currency-denominated credit increased from Shs 7.549trn to Shs 7.760trn during the period under review.

The monthly growth was higher than the 0.8 percent recorded in March 2025, indicating stronger expansion in private sector credit.

On a year-on-year basis, the stock of outstanding PSC grew by 11.4 percent, from Shs 23.305trn in March 2025 to Shs 25.965trn in March 2026. The increase was mainly attributed to higher demand for credit, supported by improved economic activity and a reduction in non-performing loans within the banking sector.

Interest rate movements

Interest rates registered mixed movements across the financial market, reflecting differing trends in the policy rate, commercial bank lending rates and yields on government securities.

In April 2026, the Central Bank Rate [CBR] remained unchanged at 9.75 percent. The Bank of Uganda noted that although risks arising from the conflict in the Middle East could exert upward pressure on inflation, the current monetary policy stance remains appropriate and aligned with prevailing macroeconomic conditions.

Lending rates

According to the report, the weighted average lending rate on shilling-denominated credit remained relatively stable, rising marginally from 18.73 percent in February 2026 to 18.89 percent in March 2026.

Meanwhile, the weighted average lending rate on foreign currency-denominated credit declined from 7.09 percent in February 2026 to 6.65 percent in March 2026. This performance was partly driven by a reduction in the risk premium charged by banks, following the continued decline in non-performing loans.

Credit extensions

The report states credit approved for disbursement in March 2026 amounted to Shs 1.996trn out of total loan applications worth Shs 3.083trn. This translated into an approval rate of 64.7 percent, down from 69.9 percent in February 2026, but still higher than the 48.6 percent recorded in the same month the previous year.

As was the case in both March 2025 and February 2026, personal and household loans accounted for the largest share of credit disbursements, taking up 26.7 percent [Shs 533.2 billion] of total approved credit in March 2026. Of this amount, Shs 163.2bln comprised electronic money credit, mainly mobile money loans.

Other major recipients of credit included business, community, social and other services, which accounted for 16.7 percent [Shs 333.5bln]; agriculture at 15.0 percent [Shs 300.3bln]; building, mortgage, construction and real estate at 14.4 percent [Shs 288.1bln]; trade at 13.6 percent [Shs 271.2bln]; and manufacturing at 7.1 percent.

https://thecooperator.news/psc-in-uganda-hits-shs-25-43trn-in-january-2026-report/

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