Uganda records highest levels of bank loan approvals
The latest report by the Ministry of Finance indicates that in July 2026, lending institutions approved sh5.162 trillion in credit for disbursement, out of total loan applications worth sh3.648 trillion.
Uganda records highest levels of bank loan approvals
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The Ugandan government has recorded the highest levels of loan approvals by commercial banks in the country since the beginning of 2026.
The latest report by the Ministry of Finance indicates that in July 2026, lending institutions approved sh5.162 trillion in credit for disbursement, out of total loan applications worth sh3.648 trillion.
This represents an approval rate of 141.5%, the highest rate recorded since the beginning of the calendar year 2026, the performance of the economy report for August 2026 says.
It also said the high level of approvals partly reflected the processing and approval of loan applications carried forward from previous months, alongside an improvement in non-performing loans, which reduced lender risk aversion and supported increased credit approvals by commercial banks.
“This resulted in an approval that was higher than the applications for that month,” he said on Friday.
Unlike in previous months, when personal and household loans accounted for the largest share of credit approved, the transport and communication sector accounted for the largest share in July 2026, at 24.8% (sh1,280.4b).
This was followed by building, mortgage, construction and real estate, which accounted for 24.0% (sh1,237.9b). Combined, the two sectors accounted for nearly half of total credit approved during the month.
Other notable recipients of credit included Business, Community, Social and Other Services (18.9%), personal and household loans (14.1%), trade (9.3%) and manufacturing (4.9%).
Lending rates
This trend was supported by improved economic conditions and a decline in non-performing loans.
The weighted average lending rate on foreign currency-denominated credit increased to 7.76% in July 2026 from 6.93% in June 2026, partly on account of volatility in foreign currency deposits.
On an annual basis, lending rates remained lower for both Shilling and foreign currency-denominated credit. Lending rates declined from 19.65% and 8.35% in July 2025 to 17.32% and 7.76% in July 2026, respectively.
The year-on-year decline in lending rates indicates an improvement in borrowing conditions, with lower financing costs expected to support private sector growth and in turn support economic activity.
The Monetary Policy Committee maintained the Central Bank Rate at 9.75% in August 2026. The Committee considered the rate sufficient to preserve price stability, while continuing to monitor global developments and their implications for the inflation outlook.