Ugandan banks approve Shs5.2 trillion loans in July

KAMPALA. Lending institutions approved Shs5.16 trillion in credit for disbursement in July, the highest level recorded since the beginning of the year, according to the Ministry of Finance.

The approvals were against loan applications worth Shs3.65 trillion, translating into an approval rate of 141.5 per cent, the ministry said in its August 2026 Performance of the Economy Report.

The report noted that the high level of approvals partly reflected the processing of loan applications carried forward from previous months.

It also attributed the increase to an improvement in non-performing loans, which reduced lenders’ risk aversion and supported increased credit approvals by commercial banks.

The data show a shift in the sectors receiving the largest share of approved credit.

Transport and communication took the biggest share in July, accounting for 24.8 per cent, or Shs1.28 trillion, according to the report.

Building, mortgage, construction and real estate followed with 24 per cent, equivalent to Shs1.24 trillion.

The two sectors together accounted for nearly half of all credit approved during the month.

Business, community, social and other services received 18.9 per cent of the approved credit, while personal and household loans accounted for 14.1 per cent.

Trade received 9.3 per cent, while manufacturing accounted for 4.9 per cent.

The shift comes as the government pushes banks to increase lending to productive sectors as part of its plan to expand the economy.

Finance Minister Henry Musasizi has urged banks to lower lending rates and increase financing to the government’s ATMS priority sectors—agro-industrialisation, tourism, minerals including oil and gas, and science, technology and innovation.

Mr Musasizi said private-sector credit needs to rise from about Shs28 trillion currently to Shs490 trillion by 2040 to support the government’s ambition of growing the economy to $500 billion.

He has also called for greater use of credit guarantees, improved risk assessment and long-term financing through the capital markets to reduce the cost and risks of lending.

The Ministry of Finance cautioned that data on credit extensions has a one-month lag, meaning the July figures were reported in the August performance report.