More Ugandans took personal and household loans from financial institutions in May 2021 compared to the April 2021, a report by the Ministry of Finance shows.

The June 2021 Performance of the Economy Report shows that on a sectoral basis, personal and household loans was the largest recipient of approved credit at 32.2%, followed by trade at 19.1%.

Other notable recipients were manufacturing (12.1%), building, construction and real estate (12.1%) and agriculture (11.0%).

“The share of credit extended to business and community services and personal and household loans grew by 39% and 35% respectively in May 2021 compared to April 2021,” the report indicates.

Weighted average lending rates for both the shilling and foreign currency denominated credit increased in May 2021 and was recorded at 19.8% and 6.8% from 18.1% and 6.5% in April 2021, respectively.

The loan uptake came just before Uganda entered into a lockdown to contain the spread of Covid-19 in June.

The June 2021 Performance of the Economy Report further shows that economic activity slowed down during the month of June following Government’s implementation of a 42-day lockdown to slow down the resurgence of COVID-19. The lockdown negatively impacted business conditions resulting in a fall in output, new orders and employment. Consequently, the Purchasing Managers index (PMI) – one of the frequent indicators of economic performance dropped to 34.9 in June from 56.5 in May 2021.