Bank teller: Money exchanges hands
The stock of outstanding Private Sector Credit increased by 2.3 percent from Shs25,377.04 billion in February 2026 to Shs 25,965.17 billion in March 2026, Business Focus reports.
According to Ministry of Finance’s Performance of the Economy Report for April 2026, the growth was registered in both Shilling-denominated credit, which rose from Shs 17,827.15 billion to Shs 18,204.98 billion, and foreign-currency denominated credit, which increased from Shs 7,549.89 billion to Shs 7,760.19 billion over the period, as shown in figure 11 below.
“This monthly growth was higher than the 0.8 percent growth recorded in March 2025, indicating higher private sector credit expansion during the period,” the report reads, adding: “On a year on year basis, the stock of outstanding Private Sector Credit exhibited an 11.4 percent growth, from Shs 23,305.19 billion in March 2025 to Shs 25,965.17 billion in March 2026.”
The report explains that the increase was mainly driven by higher demand for credit, supported by improved economic activity, alongside a reduction in non-performing loans in the banking sector.
Credit Extensions
According to Finance Ministry, the credit approved for disbursement in March 2026 amounted to Shs 1,996.03 billion out of total loan applications worth Shs 3,083.57 billion.
This translated into an approval rate of 64.7 percent, down from 69.9 percent in February 2026, but still higher than the 48.6 percent recorded in the same month the previous year (March 2025).
“As was the case in both March 2025 and February 2026, personal & household loans accounted for the largest share of credit disbursements, taking up 26.7 percent (Shs 533.2 billion) of the total approvals in March 2026. Of this amount, Shs 163.2 billion was electronic money credit (mobile
money loans),” the report says.
It adds that other major recipients of credit included business, community, social & other services at 16.7 percent (Shs 333.5 billion), agriculture at 15.0 percent (Shs 300.3 billion), building, mortgage, construction & real estate at 14.4 percent (Shs 288.1 billion), trade at 13.6 percent (Shs 271.2 billion) and manufacturing at 7.1 percent (Shs 142.6 billion).
High Lending Rates
According to the report, interest rates remain high.
“The weighted average lending rate on Shilling-denominated credit remained relatively stable, increasing marginally from 18.73 percent in February 2026 to 18.89 percent in March 2026,” the report reads in part.
It adds: “On the other hand, the weighted average lending rate on foreign-currency-denominated credit declined from 7.09 percent in February 2026 to 6.65 percent in March 2026. This performance was partly driven by a reduction in the risk premium charged by banks given the continued decline in non-performing loans.”
