KAMPALA, June 20, 2026 — Uganda’s stock of outstanding private sector credit [PSC] increased by 1.8 per cent to Shs 26.43 trillion in April 2026, up from Shs 25.9trn recorded in March, signalling sustained demand for borrowing and continued resilience in economic activity.
According to the latest Performance of the Economy Monthly Report released by the Finance ministry, the increase marked the second consecutive month of growth in private sector credit after a marginal contraction of 0.2 per cent registered in February.
The report attributed the improvement to stronger economic activity, easing lending conditions and improved loan performance across the banking sector.
“The expansion reflects continued resilience in economic activity and sustained demand for credit by the private sector, although the pace of growth moderated compared to the previous month,” the report stated.
It added that growth in outstanding credit was supported by “lower domestic lending rates and reduced lender risk aversion following improvements in loan performance as indicated by the decline in non-performing loans”.
Credit growth was recorded across both local and foreign currency lending.
Outstanding shilling-denominated credit rose to Shs 18.45trn in April from Shs 18.20trn in March, while foreign currency lending increased to Shs 7.99trn from Shs 7.76trn over the same period.
Meanwhile, lending institutions approved Shs 2.05trn for disbursement in April out of total loan applications worth Shs 4.07trn, representing an approval rate of 50.4 per cent.
Although the approval rate declined for the second consecutive month, it remained significantly above the 38.7 per cent recorded at the beginning of the calendar year.
The report noted that this suggested lending activity remained supportive despite month-on-month moderation.
Households continued to dominate borrowing, with the Personal and Household Loans segment accounting for the largest share of approved credit at 32.0 per cent, rising from 26.7 per cent in March.
Other major recipients included building, construction and real estate, which attracted 14.2 per cent of approved credit, followed by trade at 12.1 per cent, business, community, social and other services at 10.5 per cent, and mining and quarrying at 10.1 per cent.
The mining and quarrying sector registered one of the strongest increases in loan approvals during the month.
“The notable pick-up in loan approvals for the sector reflected growing investment activity and financing needs associated with the extractive industries,” the report said.
It added that the trend had been “supported by heightened expectations surrounding developments in the oil and gas sector as well as continued activity in gold-related activities”.
Lending rates
The report shows that average weighted lending rate for Shilling denominated credit in Uganda declined to 18.26 percent in April 2026, from 18.89 percent in March 2026. “This reduction was partly attributable to a lower risk premium charged by commercial banks, supported by the decline in non-performing loans.”
On the other hand, the weighted average lending rate on foreign currency-denominated credit rose to 7.34 percent in April 2026 from 6.65 percent in March 2026. “This increase was partly driven by increased uncertainty in global financial markets stemming from geopolitical tensions in the Middle East, which contributed to higher global risk premiums.”
https://thecooperator.news/uganda-lending-rates-rise-to-18-73-percent-in-february-2026/
Buy your copy of thecooperator magazine from one of our country-wide vending points or an e-copy on emag.thecooperator.news
-
-
-
-
