Uganda's private sector credit rises by 0.3% in January

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The stock of Uganda’s outstanding private sector credit rose by 0.3% to sh25.427 trillion in January 2026, up from sh25.346 trillion in December last year.

This is according to the finance ministry’s Performance of the Economy Report for February 2026.

The growth in January was mainly driven by shilling-denominated credit, which increased from sh17.705 trillion in December last year to sh17.818 trillion.

However, the 0.3% growth recorded in January was slower than the 1.3% registered in December 2025, reflecting reduced demand for credit following the festive season.

On a year-on-year basis, growth in private sector credit remained unchanged at 0.3%, generally reflecting slow credit expansion at the start of the year.

Foreign currency-denominated credit declined in January 2026 to sh7.608 trillion, down from sh7.641 trillion in December 2025, mainly due to a reduction in foreign currency deposits.

Economic experts say private sector credit is key in financing production and consumption, which in turn drives broader economic growth.

Credit extensions

The report also indicates that in January 2026, credit approved for disbursement amounted to sh1.113 trillion out of total loan applications valued at sh2.837 trillion, translating into an approval rate of 39.2%.

This was significantly lower than the 73.0% approval rate recorded in December 2025, partly due to reduced lending to sectors such as trade, manufacturing and agriculture, as banks became more cautious about extending credit for contracts and projects in relatively risky sectors during the election period.

Despite the decline, the personal and household loans sector continued to account for the largest share of approved credit in January 2026, receiving 41.4% of the total, up from 23.8% in December 2025.

This was followed by building, construction and real estate at 15.2%, trade at 13.2%, business, community, social and other services at 11.0%, and agriculture at 9.0%.