Private sector credit grows to 10.5 per cent – BoU

Thursday August 30 2018

Dr Louis Kasekende, the Bank of Uganda deputy

Dr Louis Kasekende, the Bank of Uganda deputy governor. FILE PHOTO 

By MARTIN LUTHER OKETCH

Kampala. Private sector credit growth has picked up with the latest growth rate standing at 10.5 per cent after close to five years of sluggishness.

Speaking at dinner in Kampala, Dr Louis Kasekende, the Bank of Uganda deputy governor, said Uganda’s banking sector as a whole has exhibited resilience to various shocks and is generally sound.
During the period, Dr Kasekende said there had been sufficient capital with all banks meeting the minimum regulatory capital adequacy as of June 30.

“Extension of credit to the private sector by commercial banks is on a positive trajectory with an annual growth of 10.5 percent in June 2018 relative to a low growth of 2.8 per cent in November 2017. It is more pleasing that key sectors such as manufacturing are recording relative robust credit growth,” he said.

Lending rates, he noted, also continue to decline in line with the reduced Central Bank Rate (CBR), which currently stands at 9 per cent.
Interest rates on shilling denominated loans were recorded at an average of 17.7 per cent in June 2018, which Dr Kasekende said is perhaps the lowest in more than a decade.

“It is commendable that banks are heeding our call to reduce lending rates and I want to ask them to continue seeking efficient gains in their operations and passing on these gains to the customers in form of much lower lending rates,” he said. Dr Kasekende said this during a farewell dinner organised for the outgoing chief executive officer of Commercial Bank of Africa.

“Let me state that Commercial Bank of Africa remains well-capitalised way above the regulatory requirements, in spite of the inevitable challenges of entering a new competitive market like ours,” Dr Kasekende.

Focusing on customers
The incoming Commercial Bank of Africa, Mr Anthony Ndegwa pledged to continue using a customer-focused approach to grow the bank.
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