Personal and home loans dominate as banks lend Shs1.9 trillion in one month

KAMPALA — Personal and household loans remained the biggest driver of private sector credit in March 2026 as commercial banks approved nearly Shs2 trillion in loans, according to the latest Performance of the Economy Report released by the Ministry of Finance, Planning and Economic Development.

The report for April 2026 shows that financial institutions approved credit worth Shs1.996 trillion out of total loan applications valued at Shs3.084 trillion during March.

This represented an approval rate of 64.7 percent, lower than the 69.9 percent recorded in February 2026, but significantly higher than the 48.6 percent registered in March 2025.

Personal and household loans accounted for the largest share of approved credit, taking up 26.7 percent of total disbursements amounting to Shs533.2 billion.

Of this amount, Shs163.2 billion was issued through electronic money credit, mainly mobile money loans, highlighting the growing role of digital lending platforms in Uganda’s credit market.

The report indicates that business, community, social and other services received the second-largest share of approved loans at 16.7 percent, equivalent to Shs333.5 billion.

Agriculture followed with 15 percent of approved credit worth Shs300.3 billion, reflecting continued lending to the productive sector amid efforts to boost commercial farming and agro-industrialisation.

The building, mortgage, construction and real estate sector accounted for 14.4 percent of total approved credit, receiving Shs288.1 billion, while the trade sector attracted Shs271.2 billion representing 13.6 percent of total approvals.

Manufacturing received Shs142.6 billion, equivalent to 7.1 percent of the approved loans.

The Ministry of Finance said the sustained growth in credit approvals compared to the same period last year signals improving private sector activity and increased confidence in the economy despite tighter lending conditions.

Analysts say the dominance of personal and household borrowing reflects sustained consumer demand as well as growing reliance on digital credit solutions for short-term financing needs.

However, the slight decline in the loan approval rate from February suggests banks remain cautious amid evolving economic conditions and risk assessments across sectors.