Matia Kasaija, Finance minister. PHOTO/FILE

Commercial banks lent out Shs1.068 trillion in the month of September 2021, the Ministry of Finance Economic Performance Report states, an indication that the economy is on the path to recovery.

This was a 30.1 percent increase from Shs821.4b lent out in August.

According to the report, this is an indication that banks are no longer fearing to lend to distressed people and organisations following the Covid-19 pandemic.

The report also indicates that at least 55.8 percent of the credit, which was applied for was approved for disbursement. 

Of the Shs1.068 trillion that was lent out in September, 23.1 percent went to personal and household loans, while trade took a 17.9 percent share. Manufacturing, took 15 percent while agriculture took 11 percent.

According to the report, commercial bank lending rates declined from an average of 20.9 percent in July 2020 to 17 percent in June 2021, which contributed to a growth of 7.1 percent in private sector lending.

But the report indicated an increase in lending rates, which during September rose to 19.05 percent for shilling denominated loans and 6.99 percent foreign currency denominated loans.

During the year, Uganda’s exchange rate experienced appreciation pressures but remained relatively stable.

During September, outstanding private sector credit, increased to Shs18.44 trillion, which was an increase from Shs18.41 trillion in August.