Uganda among countries with easy access to credit
Credit access, although still relatively expensive, has become easier due to the advent of mobile money. Photo / File
What you need to know:
- Standard Bank indicates it is increasingly getting easier to access credit in Uganda compared to other African countries
A report by Standard Bank indicates that it is increasingly becoming easy to access credit in Uganda compared to other African countries.
The Africa Trade Barometer report, which measures economic parameters including governance, infrastructure, trade openness, financial behaviour and access to credit among others, notes that due to the growing influence of mobile money, more Ugandans are now accessing credit compared to other countries.
The report notes that at least 49 percent of surveyed businesses believe it is now easier to access credit, which is an improvement from 38 percent.
Uganda is only next to South Africa, which the survey shows that 50 percent of surveyed businesses believe it is easier to access credit in South Africa, which has improved from 34 percent.
“More businesses in ... Uganda (from 38 percent to 49 percent) believe it’s easier to access credit,” the report notes, highlighting that while the cost of credit is relatively high, access has been extended through mobile money.
Mobile money is a key driver of financial inclusion in Uganda with government indicating it has great potential to support private sector credit growth.
For the first time in August, the Ministry of Finance captured the contribution of mobile money loans to private sector credit, which it indicated had grown to a monthly average of Shs33b, or 2.9 percent of private sector credit.
Obtaining credit in Africa has become more difficult with some countries such as Mozambique and Ghana recording significant declines in perception due to the high costs.
The report offers a comparative view of enablers and challenges that facilitate trade across 10 key African markets with the view of providing insights on African markets.
It is gathered through qualitative and quantitative intelligence from 2,554 firms across 10 economies, with findings enriched further by third-party sources such as World Bank, International Trade Centre, and central banks.
However, the report notes that Uganda is performing poorly in relation to the perception of infrastructure as an aid to trade, noting that the country, including others, suffers the most from impaired roads, ports, airports, telecommunications, water supply outages, customs and trade regulations.
