Uganda’s financial sector assets grow to UGX 38 trillion

Uganda’s financial sector continues to show signs of steady growth and resilience, with supervised financial institutions (SFIs) expanding their asset base, increasing customer deposits, and improving liquidity.

According to the Bank of Uganda’s (BoU) Quarterly Financial Stability Review for March 2025, the sector remains robust despite modest increases in exposure to public debt.

As of March 2025, the banking sector’s exposure to government securities — measured as a share of total assets — edged up slightly to 30.4 percent, from 29.9 percent in December 2024. However, the central bank noted that SFIs remain well-capitalized, maintaining adequate buffers to support both private sector lending and public investment without jeopardizing stability.

One of the key drivers of the sector’s asset growth was a 4 percent rise in customer deposits, which reached UGX 38 trillion, reversing a prior decline. Deposits continue to be the primary funding source for financial institutions, making up 83.4 percent of their total liabilities. The increase was largely attributed to a 6.6 percent growth in foreign currency deposits and a 2.7 percent rise in Uganda shilling-denominated deposits, pointing to renewed depositor confidence amid improved economic conditions.

In addition, the total liquid assets held by SFIs grew by 1.1 percent, reaching UGX 20.5 trillion, driven largely by increased investment in government securities by commercial banks and credit institutions. This led to a stronger liquidity ratio, rising to 51.8 percent in March 2025, up from 51.1 percent in December 2024 — more than double the 20 percent regulatory minimum.

Credit extension also picked up pace. The total value of loans issued by SFIs rose by 6.8 percent year-on-year to UGX 22.9 trillion, improving slightly from 6.5 percent growth in the year to March 2024. Although the share of private sector credit as a proportion of total assets dipped marginally to 40.5 percent (down from 41 percent in December 2024), it remains a cornerstone of banking activity.

Looking ahead, the Bank of Uganda expects asset quality to remain stable, with non-performing loans (NPLs) anticipated to stay within manageable levels. This outlook is supported by Uganda’s ongoing economic recovery, improved business sentiment, and tighter risk management practices across the banking sector.

Overall, the report paints a picture of a maturing financial system — one that is increasingly diversified, liquid, and resilient to shocks, even amid global economic uncertainties.