Private sector credit rises to Shs26.4 trillion as borrowing demand remains strong

KAMPALA — Outstanding private sector credit increased for the second consecutive month in April 2026, rising by 1.8 percent to Shs26.43 trillion from Shs25.97 trillion recorded in March, according to the Ministry of Finance’s latest Performance of the Economy Report.

The growth follows a 0.2 percent contraction registered in February and signals continued resilience in economic activity and sustained demand for financing by businesses and households.

The Ministry attributed the increase in credit to lower domestic lending rates and reduced risk aversion among lenders, supported by improved loan performance and a decline in non-performing loans.

Data from the report shows that growth was recorded in both local and foreign currency lending.

Shilling-denominated credit rose to Shs18.45 trillion in April from Shs18.20 trillion in March, while foreign currency-denominated credit increased to Shs7.99 trillion from Shs7.76 trillion over the same period.

The report indicates that lending institutions approved loans worth Shs2.05 trillion in April out of total applications valued at Shs4.07 trillion, translating into an approval rate of 50.4 percent.

Although the approval rate declined for the second consecutive month, it remained above the 38.7 percent recorded at the beginning of the year, suggesting that lending activity continued to support private sector growth.

Personal and household loans accounted for the largest share of approved credit during the month, receiving 32 percent of all approved loans, up from 26.7 percent in March.

The building, construction and real estate sector followed with 14.2 percent of approved credit, while trade received 12.1 percent. Business, community, social and other services accounted for 10.5 percent, while mining and quarrying received 10.1 percent.

The Ministry noted a significant increase in loan approvals to the mining and quarrying sector during April, reflecting growing investment activity and financing needs within the extractive industries.

According to the report, the surge in credit to the sector was driven by heightened expectations surrounding developments in Uganda’s oil and gas industry as well as continued activity in the gold sector.

The latest figures suggest that confidence among borrowers and lenders remains firm, with increased access to credit expected to support business expansion, household consumption and investment across key sectors of the economy.