Financial institutions in Uganda approved loans worth Shs1.3Trn in May 2024, with personal and household loans taking the largest share.
According to the Performance of the Economy Monthly Reportfor June 2024 released by the Ministry of Finance, Planning and Economic Development, the value of credit approved for disbursement amounted to Shs1.331Trn up from Shs1.280Trn approved in April 2024, thus representing an approval rate of 69.2% of the Shs1.922Trn loans applied for during the month.
“Personal and household loans accounted for the largest share at 26.3% of the total credit approved for lending, followed by the Trade and Manufacturing sectors at 20.6% and 15.9%, respectively,” as noted in the report.
However, the report also indicated that financial institutions are struggling to recover some of the loans approved, after the report indicated that the stock of outstanding private sector credit increased by 0.5% in May 2024, reaching Shs21.650Trn from Shs21.537Trn in April 2024.
“Of this total, Shs15.237Trn was Shilling-denominated credit, while Shs6.412Trn was foreign currency-denominated credit. This was partly attributed to higher credit extensions particularly to borrowers in the trade and manufacturing sectors and for personal and household loans during the month,” the report says.
