Private Sector Credit (PSC) grew by 6.5% in June 2023 down from 9.0% in May 2023 and 10.7% in April 2023, the Bank of Uganda has said in its Monetary Policy Report for August 2023.
The report says PSC declined across major sectors except for personal, trade, and agriculture.
“Total credit extensions fell to Shs 4.44 tn from Shs 4.45 tn while recoveries increased to Shs 4.04 tn from Shs 3.92 tn,” the report says, adding: “Demand for and supply of credit declined to Shs. 5.79tn and Shs. 3.86tn from Shs. 6.6tn and Shs. 4.02tn respectively.”
The report further adds that the lending rates continued to rise in the Quarter to June 2023, reflecting the tight monetary conditions (19.27% from 19.18% in Quarter to March 2023).
BoU reduced the Central Bank Rate (CBR), a key lending rate for commercial banks by 50 basis points to 9.5% in August 2023.
