Uganda records fastest private sector credit growth across EA

Kampala. Stanbic Bank has indicated that private sector credit grew much faster in Uganda compared to other East African countries in 2018.
This, according to Stanbic Bank, is testimony that Ugandan banks are lending more to the private sector than their counterparts in the region despite.

However, interest rates continue to be a serious impediment across the region with Uganda being more affected.
Interest rates in Uganda stand at an average of 24 per cent while Kenya has maintained a cap since 2016 above which commercial banks can charge. In Tanzania, according to data from Bank of Tanzania, charge an average of 17.5 per cent as of November 2018.

Speaking at the Stanbic economic forum in Kampala early this week, Mr Jabran Qureish, the Stanbic East Africa economist, said private sector credit growth in Uganda is much faster than other EAC countries.
For instance, he said on the sidelines of the launch, that private sector credit in Uganda stands at above 11 per cent per annum compared to 4 per cent for Kenya and 3 per cent for Tanzania.

However, Mr Qureish said, private sector credit in Uganda was yet pick up to the level it stood at four years ago. Between 2014 and 2015, private sector credit stood at between 30 and 40 per cent per annum.
Recently, Bank of Uganda said private sector credit was recovering from shocks due to improved economic activity, improvement in asset quality (decreasing NPLs) and associated easing of credit conditions.

According to the Central Bank, private sector credit in the quarter ended December stood at 11.3 per cent compared to 11.1 per cent for the quarter ended September 2018.
Mr Jabran also said that Uganda’s economic outlook remains positive compared to other East African member states with projections putting its growth at 6 per cent.

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