Uganda approves Shs1.5 trillion in credit for April 2025

Uganda’s financial sector approved Shs 1.547 trillion in credit for disbursement in April 2025, reflecting a strong recovery in lender confidence and a significant jump in approval rates compared to the previous month.

This is according to the Ministry of Finance’s Performance of the Economy Report for May 2025, which details credit trends and broader macroeconomic indicators.

The approved amount represents 75.4% of the total credit applications valued at Shs 2.051 trillion submitted during the month, a marked improvement from the 48.6% approval rate recorded in March. This surge suggests growing optimism in the banking sector and improved creditworthiness among borrowers.

As has been the trend since the start of the 2024/25 financial year, personal and household loans dominated the credit market, accounting for the largest portion — 31.5% — of the total amount approved. This translates to Shs 487.4 billion, signaling sustained demand from individuals for consumption, education, housing, and other personal needs.

The second-largest share of approved credit went to the Business, Community, Social, and Other Services category, which took up 17.4% (Shs 269.39 billion). Manufacturing followed at 13.4% (Shs 208.06 billion), while the trade sector received 11.3% (Shs 174.35 billion). Agriculture, despite being a key pillar of the Ugandan economy, accounted for 10.8% (Shs 167.91 billion) of the approved loans.

Analysts note that while the increase in credit approvals is encouraging, the distribution also highlights persistent structural patterns in Uganda’s lending environment. The dominance of personal and household borrowing suggests that consumption remains a stronger driver of credit demand than productive investment in sectors like agriculture or manufacturing.

Still, the steady flow of credit into the business and manufacturing sectors offers some optimism for medium-term growth and job creation. The Ministry of Finance noted in the report that the performance of credit extension is aligned with the broader objective of supporting private sector growth as a means to drive Uganda’s post-COVID recovery and long-term development goals under Vision 2040.

The April credit figures come against a backdrop of stable inflation and a cautiously accommodative monetary policy stance by the Bank of Uganda, which has maintained the Central Bank Rate (CBR) at levels conducive to borrowing and investment.

As Uganda moves toward the end of the financial year in June, continued monitoring of credit trends will be crucial to understanding the pace and quality of private sector activity across different sectors of the economy.