Uganda’s private sector credit grows as digital lending expands

Uganda’s private sector credit registered notable growth in February 2025, with figures showing a 7 percent increase compared to the previous month.

According to the Performance of the Economy Report for March 2025 released by the Ministry of Finance, Planning and Economic Development, credit approved for disbursement during the month amounted to UGX 1.34 trillion, up from UGX 1.25 trillion in January.

The report attributes the rise to increased demand for credit across several key sectors. The personal and household sub-sector received the largest share of total credit at 37.9 percent, followed by building, construction and real estate (16.2 percent), trade (13.8 percent), and agriculture (9.3 percent).

A significant development during the month was the growth in digital lending. The Ministry noted that 28.2 percent (equivalent to UGX 143.09 billion) of loans to the personal and household sub-sector were disbursed digitally. This marks a continued shift towards technology-driven financial services, reflecting progress in the government’s financial inclusion agenda.

“The rise in digital credit access is a result of ongoing reforms aimed at improving access to financial services through digital platforms,” the report noted.

Meanwhile, the stock of outstanding private sector credit also increased. It rose by 1.1 percent, reaching UGX 23.12 trillion in February, up from UGX 22.88 trillion in January. This growth was primarily driven by a 3.0 percent increase in foreign currency-denominated loans, which rose from UGX 6.51 trillion to UGX 6.70 trillion over the period.

In comparison, Shilling-denominated credit grew modestly by 0.3 percent, from UGX 16.37 trillion to UGX 16.42 trillion.

The continued expansion in credit is seen as a sign of increased economic activity and business confidence, even as the country navigates global and regional economic headwinds. However, experts caution that careful monitoring is necessary to ensure responsible borrowing, particularly in the household segment where demand is highest.

As Uganda deepens its recovery from recent shocks, access to credit—especially through digital means—is expected to play a central role in driving inclusive growth and supporting the private sector.