KAMPALA, August 23- 2026 – The stock of outstanding Private Sector Credit [ PSC ] in Uganda increased by 3.8 percent to Shs 27.7 trillion in June 2026, from Shs 26.7trn recorded in May 2026, according to the latest Performance of the Economy Monthly Report.
The report, compiled by the Finance ministry for the month of July 2026, shows that the PSC growth was registered in both Shilling-denominated credit, which rose to Shs 19.2trn in June, from Shs 18.55trn in May 2026, and foreign-currency-denominated credit, which increased to Shs 8.5trn in June 2026, from Shs 8.2trn over the period.
“The increase was partly supported by lower lending rates and higher credit extensions, particularly to the transport and communication; electricity and water; business, community & social sectors, as well as personal and household loans,” says the report.
When compared to June 2025, the stock of outstanding PSC grew by 16.0 percent to Shs 27.7trn in June 2026, from Shs 23.9trn in May 2026. “The increase was primarily driven by higher demand for credit, supported by improved economic activity and positive business sentiments,” says the report.
This was reflected in the growth of gross domestic product [GDP] from 6.3 percent in financial year 2024/25 to 6.4 percent in FY 2025/26, while the Business Tendency Index [BTI] remained above the 50-point threshold over the period.
Credit Extensions
The credit approved for disbursement in June 2026 amounted to Shs 2.1trn, out of total loan applications worth Shs 3.3trn. “This translated into an approval rate of 63.2 percent, down from 73.8 percent in May 2026, but still higher than the 61.3 percent recorded in the same month the previous year,” states the report.
The report shows that during June 2026, personal & household loans accounted for the largest share of credit disbursements, taking up 38.3 percent of total approvals. Of this amount, Shs 186.4 billion was electronic money credit.
Other major recipients of credit included trade at 15.6 percent [Shs 324.4 billion], agriculture at 11.3 percent [Shs 233.7bln], business, community, social & other services at 11.2 percent [Shs 233.2bln], building, mortgage, construction & real estate at 10.1 percent (Shs 210.7bln), and transport, communication, electricity & water at 8.5 percent [Shs 176.6bln].
Lending rates
Meanwhile, the report says the weighted average lending rates on both Shilling and foreign-currency-denominated credit declined in June 2026. The lending rate on Shilling-denominated credit fell for the third consecutive month [since April 2026], declining from 18.00 percent in May 2026 to 16.93 percent in June 2026. This decline was mainly attributed to lower risk premiums on loans following continued improvement in economic activity.
Similarly, the weighted average lending rate on foreign-currency-denominated credit declined for the second consecutive month [since May 2026], from 7.28 percent to 6.93 percent over the same period. “This was partly supported by increased foreign-currency deposits, stemming from sustained foreign direct investment inflows,” states the report.
According to the report, the downward trend in lending rates was also evident on a year-to-year basis, with weighted average lending rate on Shilling-denominated credit declining to 16.93 percent in June 2026, from 19.07 percent in June 2025, while the weighted average lending rate on foreign-currency-denominated credit reduced to 6.93 percent from 8.78 percent. “This reflects a gradual easing of borrowing costs in the economy,” the report says.
https://thecooperator.news/ugandas-outstanding-psc-jumps-1-8-percent-in-april-2026/
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