Business
Private sector credit grows for second month in a row
“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.”
Economic experts say private sector credit is key to financing production and consumption, which in turn drives broader economic growth.
By: Umar Kashaka, Journalist @New Vision
KAMPALA - The stock of Uganda’s outstanding private sector credit grew for the second consecutive month in April 2026, reflecting continued resilience in economic activity.
Official figures show a 1.8 per cent increase, from sh25,965.17 billion in March 2026 to sh26,434.34 billion in April 2026.
“This marked the second consecutive month of growth in private sector credit following a contraction of 0.2 percent in February 2026,” the finance ministry’s Performance of the Economy Report for May 2026 says.
“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 says the growth in outstanding credit was further 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.
Economic experts say private sector credit is key to financing production and consumption, which in turn drives broader economic growth.
Growth in credit was recorded across both local and foreign currency lending. Shilling-denominated credit rose from sh18,204.98 billion in March 2026 to sh18,445.33 billion in April 2026, while foreign currency-denominated credit increased from sh7,760.19 billion to sh7,989.0 billion over the same period.
Real sector
Preliminary estimates from the Uganda Bureau of Statistics indicate that the size of the economy increased from sh227,875 billion in the 2024/25 financial year to sh250,447 billion in the 2025/26 financial year.
In real terms, the May 2026 report says economic growth accelerated slightly to 6.4 per cent from 6.3 per cent in the previous financial year.
This performance was mainly supported by stronger aggregate demand, increased investment and export activity, reflected in growth across the agriculture, industry and services sectors.
Economic experts say private sector credit is key to financing production and consumption, which in turn drives broader economic growth.
Growth in credit was recorded across both local and foreign currency lending. Shilling-denominated credit rose from sh18,204.98 billion in March 2026 to sh18,445.33 billion in April 2026, while foreign currency-denominated credit increased from sh7,760.19 billion to sh7,989.0 billion over the same period.
Real sector
Preliminary estimates from the Uganda Bureau of Statistics indicate that the size of the economy increased from sh227,875 billion in the 2024/25 financial year to sh250,447 billion in the 2025/26 financial year.
In real terms, the May 2026 report says economic growth accelerated slightly to 6.4 per cent from 6.3 per cent in the previous financial year.
This performance was mainly supported by stronger aggregate demand, increased investment and export activity, reflected in growth across the agriculture, industry and services sectors.
High-frequency indicators continued to signal resilience and expansion in economic activity during May 2026.
The Purchasing Managers’ Index remained above the 50.0 threshold at 54.1, indicating sustained improvement in business conditions despite easing slightly from 55.0 recorded in April 2026. The expansion was underpinned by growth in output and new orders.
Business sentiment also improved during the month. The Business Tendency Index increased to 56.7 in May 2026 from 55.2 in April 2026, reflecting continued optimism across most monitored sectors.
This optimism was largely driven by robust consumer demand, although confidence in the construction sector remained subdued.
The Purchasing Managers’ Index remained above the 50.0 threshold at 54.1, indicating sustained improvement in business conditions despite easing slightly from 55.0 recorded in April 2026. The expansion was underpinned by growth in output and new orders.
Business sentiment also improved during the month. The Business Tendency Index increased to 56.7 in May 2026 from 55.2 in April 2026, reflecting continued optimism across most monitored sectors.
This optimism was largely driven by robust consumer demand, although confidence in the construction sector remained subdued.