Country Financial Sector Profilesback

Financial Sector Overview

Economic Context

Uganda has experienced strong economic growth over the last decade. Between 2010 and 2017, the average annual growth rate was 5.15%, higher than for sub-Saharan Africa (3.87%). This growth was driven by information and communication technology (ICT), financial services, transportation, manufacturing and agriculture. The country is endowed with abundant natural resources (oil, gas and minerals) as well as diversified wildlife conducive to the development of the tourism industry. However, there are several major challenges facing the Ugandan economy, including low productivity in the agricultural and private sectors. Agriculture, which is the main source of income for the majority of the population, accounts for more than half of exports and about one quarter of the gross domestic product (GDP). This activity generates employment for 70% of the predominantly young population. The business environment has deteriorated according to the World Bank's Doing Business rating. The country, which ranked 122nd in 2010, dropped to 127th out of 190 countries in 2018, losing 5 spots. A second national development plan has been developed for 2016-2020, with the objective of propelling Uganda into the middle-income category by 2020, with projected per capita income of more than USD 1,000.

Overview of the Financial Sector

The banking financial sector in December 2017 included 24 commercial banks with 544 branches, 4 credit institutions with 66 branches and 5 microfinance deposit institutions with a network of 78 branches. The banking financial sector regulator is the Central Bank of Uganda.

Typology of Financial Institutions

Typology of Financial Institutions

The non-bank financial sector includes credit unions and other types of microfinance institutions. These are under the supervision of the Uganda Microfinance Regulatory Authority (UMRA). A partial typology of the sector is established from institutions exercising under the supervision of UMRA and the Central Bank. In addition to the 28 life and non-life insurance companies in the non-bank financial sector, a variety of other stakeholders include mobile money operators and social protection institutions. The capital market comprises 2 stock exchanges.

A new Insurance (bancassurance) regulation was published in July 2017. A regulation on Islamic banking was also published in February 2018, paving the way for the launch of the first Islamic financial products (IMF, 2019). To combat money laundering and terrorism financing, the authorities have gradually strengthened the legal and regulatory framework, notably through the 2001 Anti-Terrorism Act (amended in 2017) and the 2013 Anti-Money Laundering Act. A Financial Intelligence Authority has also been established within this regulatory framework to oversee and enforce financial integrity. Under the 2016 Financial Institutions Amendment Act, the Deposit Protection Fund (DPF) became a separate legal entity managed and operated by the Central Bank.

Despite these important institutional developments, Uganda’s financial sector remains undeveloped. Bank credit to the private sector stagnated around 12% between 2012 and 2015, before increasing to 13.4% of GDP in 2016. Nevertheless, it remains well below the sub-Saharan average (21.3%). Market capitalisation equivalent to 30.7% of GDP is also below the sub-Saharan average (46.7%). The assets of banks and non-bank financial institutions were respectively 18.7 and 5.2% of GDP in 2016.

Banking Sector

Structure of the banking market - As of end-June 2017, three systemically important banks accounted for 42.8% of total banking sector assets. The sector's assets, which have been increasing since 2012, amounted to UGX 26,528.1 billion (USD 7.2 billion), i.e. about 27% of GDP. The increased assets are mainly the outcome of the increase in Bank loans, advances and securities holdings.

Banking sector credit and deposit structure - Bank credit to the private sector amounted to UGX 11,661.6 billion (USD 3.1 billion), or 11.8% of GDP in 2017. The recent decline in credit growth is the outcome of commercial bank reluctance to finance the private sector due to an increase in non-performing loans and sluggish economic growth over the past three years. Bank credit is granted mainly to the real estate and trade sectors, and to households. At end-2017, deposits accounting for 83.2% of total bank liabilities amounted to UGX 18 181.1 billion (USD 4.9 billion). They mainly derive from retail deposits, financial securities and wholesale financing consisting of unsecured loans on the domestic interbank market and others contracted on the currency swap market.

Lending and deposit rates - The tightening of monetary policy between 2014 and 2017 was aimed at absorbing inflationary pressures. In line with the change in the prime rate, the average borrowing rate increased between 2015 and 2016 (22.6 and 23.9% respectively) before falling in 2017. The reduction in the prime rate from 12% in 2016 to 9.5% in 2017 was aimed at easing monetary policy in view of increasing bank credit. The average credit rate trend reflected a trajectory similar to that of the borrowing rate.

Financial strength of the banking sector - The banking sector remained well capitalised, and the capital adequacy ratio and basic solvency ratio (Tier I) were in line with regulatory minimum thresholds of 12% and 8% respectively, between 2012 and 2017. Bank liquidity remained satisfactory, with the liquidity ratio rising steadily above the regulatory minimum (20%). However, the quality of assets gradually deteriorated between 2014 and 2016, with non-performing loans reaching their highest level in 2016 (10.7%). Non-recoverable receivables more than doubled between 2015 and 2016, rising from UGX 573.4 billion to 1,203.2 billion (USD 327 million). In 2017, the authorities cancelled UGX 289 billion (USD 78.3 million) in non-performing loans and closed Crane Bank with 46.9% of total non-performing loans. Non-performing loans in agriculture and trade accounted for the majority of non-performing loans in the banking sector as of end-2017.

Financial Inclusion

The authorities are implementing a five-year financial inclusion strategy (2017-2022) to improve financial education, develop credit infrastructure, promote formal saving, investment and insurance, and protect consumers. Findings of the Finscope survey (2018) reveal that 78% of Ugandan adults (14.4 million people) are financially included, both formally and informally, in the use of savings, credit, insurance and payment services. More than half of the adults (59.2%) had an account in 2017, i.e. an increase of 33.3% from 2014, and a level well above the sub-Saharan average (42.6%).

Several factors have contributed towards improving financial inclusion in Uganda, among which appropriate regulation via the 2016 Financial Institutions (Amendment) Act and the Deposit Protection Fund reform. Access to financial services has also benefited from the development of bancassurance and the gradual increase in the number of bank branches and ATMs to 544 and 821 respectively in 2017, compared to 496 and 714 in 2012. Obstacles to supply include lack of proximity to commercial banks, unavailability of services offered by credit unions in resident communities and insurance services considered inaccessible.

The Microfinance Sector

The 2016 Tier 4 Financial Institutions and Money Lenders Act came into force in July 2017. The Tier 4 typology implemented by this regulatory framework includes a set of institutions not regulated by the Central Bank, notably credit unions, MFIs not authorised to collect deposits (Tier 4 MFIs), self-help groups and community MFIs. These are regulated by the Uganda Microfinance Regulatory Authority (UMRA).

In 2017, the microfinance sector included 5 deposit-taking MFIs, 70 Tier 4 MFIs, 1,900 savings and credit cooperatives and informal community-based microfinance services, including Village Savings and Loan Associations (VSLAs), Rotating Savings and Credit Associations (ROSCAs) and investment and savings clubs. Commercial banks are also involved in this sector, although their participation is relatively limited.

The assets of deposit-taking MFIs rose to UGX 469.8 billion (USD127.6 million) in 2017 while equity more than doubled from UGX 66.8 billion (USD 18.2 million) in 2012 to 153.3 billion (USD 41.7 billion) in 2017. Between 2012 and 2017, deposit-taking MFIs remained well capitalised, with equity capital maintained above the regulatory minimum of UGX 500 million (USD 135,857). The capital adequacy and basic solvency ratios were 41.9 and 38.5% respectively in 2017. However, non-performing loans continued to increase to 5.3% in 2016 before declining to 5% as a result of recovery and credit risk management efforts. Deposit-taking MFIs remained liquid at a level of liquidity ratio consistent with the regulatory minimum of 15%. Profitability remained positive despite the decline observed since 2014.

Deposit-taking MFIs have a limited capacity for competition due to their relatively small number, worsened by the fact that only one of them holds more than half of the loans and deposits. This situation is further exacerbated since MFIs cannot directly participate in the clearing system because of the regulations in force, even though they are subject to prudential supervision by the Central Bank. Moreover, despite their potential to improve access to financial services for low-income people especially small farmers, savings and credit unions are not very competitive, and members lack confidence in them following reported issues of recurrent mismanagement. There is poor regulation of the sector, inadequate accounting by some cooperatives, and staff are generally underqualified. Several initiatives have been 

made by the Ugandan Government to build the capacity of these credit unions, including the Project for Financial Inclusion in Rural Areas (PROFIRA) and the Ugandan Cooperative Alliance (UCA). 

Digital Finance

A set of existing texts regulates the activities of some stakeholders in this sector. These include the Bank of Uganda Act, the 2004 Financial Institutions Act, the 2010 Contracts Act, the 2011 Electronic Transactions Act, the Computer Misuse Act, the Electronic Signatures Act and the 2013 Anti-Money Laundering Act. Uganda has a national payment systems policy that was approved on 22 December 2017. This policy aims to promote the security and efficiency of payment systems in the country. The main payment systems include the Ugandan National Interbank Settlement System (UNISS), the Electronic Clearing System (ECS) and mobile payment services. Interbank settlements recorded 793,230 transactions in 2017, for a total value of UGX 298,900 billion (USD 81.3 billion) - an increase of 9% in volume and 12.8% in value, respectively, compared to 2016. In 2017, the mobile money subsector had 7 service providers[1] for 23.4 million registered customers, up 8.4% from 2016. The value of transactions rose to UGX 63,100 billion (USD 17.2 billion), an increase of 44% compared to 2016. Industry interoperability is supported by network switch technology (Interswitch[2]). Seventeen (17) financial institutions[3] were connected to the Interswitch network, providing their customers with shared access to a network of 477 ATMs.

Although consumer access to payment systems has improved owing to mobile money progress, cash paymentscontinue to dominate Uganda's transaction settlements, accounting for 80% of all transactions. The concentration in the interbank settlement system remains quite significant, with 4 banks accounting for 60.4% of total payments in June 2017. Systemically important banks accounted for 33% and 34% of the volume and value of interbank settlement transactions, respectively. A number of operational risks are underscored, including recently reported issues of fraud in the mobile money sector, which highlighted weaknesses in the consumer protection system. Lastly, there is no law entirely devoted to payment systems oversight in Uganda, as the Central Bank's actions in this regard are currently limited.  The existing regulatory body does not deal effectively with constraints related to the operation or development of payment systems.

SME Financing

Uganda's micro-, small- and medium-sized enterprises (MSMEs) are largely concentrated in urban areas and operate in different business sectors including hotels, wholesale and retail trade, agriculture and ITC. Most of them are in the informal sector and are mostly young businesses (1 to 5 years old), while less than 10% of them have been in business for more than 20 years. Most MSMEs are sole proprietors and account for 43% of the total. SME financing remains problematic. According to 2013 World Bank surveys, only 8.1% of companies report benefiting from bank loans for investment financing. This rate is even lower for small businesses (5.4%). In addition to the high cost of borrowing, the majority of financial products are conditioned by significant real estate guarantees. Most agricultural loans are granted by banks, but this segment accounts for only 8% of their portfolios on average.

Insurance Sector

The sector is regulated by the 2017 Insurance Act and supervised by the Insurance Regulatory Authority (IRA). The 28 insurance companies operating in 2017 consisted of 19 non-life insurance companies and 9 life insurance companies. Twenty-five (25) of these companies belonged to foreign groups. The sector also recorded 6 health management organisations, 34 insurance brokers, 22 claims adjusters and 2,006 agents. Twelve (12) approvals were granted as part of bancassurance activities.

Gross written premiums stood at UGX 728.5 billion (USD 197.7 million) in 2017, i.e. an increase of 14.75% compared with 2016. Non-life insurance dominates the market and accounts for 69.63% of total gross premiums written in 2017. The respective shares of life insurance and health management organisations are 23.13% and 7.24%. The net assets of the sector increased by 15.6% between 2016 and 2017, rising from UGX 410 billion (USD 111.3 million) to 474 billion (USD 128 million).

The insurance penetration rate remains low at 0.81% in 2017. Formal insurance products are underused, with Ugandan adults preferring informal coverage such as membership in community health systems, funeral societies and community savings groups that provide financial assistance to members as needed. Moreover, although most adults derive their income from agriculture, crop or livestock insurance subscriptions are non-existent. Fraud risks have also been reported in the industry and the regulator has indicated its resolve to transition to risk-based supervision.

The Risk Capital Market

The Capital Markets Authority is responsible for licensing private equity market activities and supervising the Uganda Stock Exchange. Domestic equity activity is dominated by foreign institutional investors, who make up more than 80% of stock market trading. The shares listed on the Uganda Stock Exchange concern eight local companies and eight companies listed on the Nairobi Stock Exchange (NSE). Out of the eight locally listed companies, four are financial sector companies (three commercial banks and one insurance company), while the others operate in the energy and services sectors. A second stock exchange (ALTX East Africa Limited) was launched in July 2016. However, it does not operate at full capacity and the stakeholders are limited in number. 

A 10-year transformation master plan was launched in June 2017 by the Capital Markets Authority (CMA) to provide the sector with strategic direction. The total volume of shares traded decreased by 9.7% in 2017, from UGX 1,230.7 million in June 2016 to 1,111.1 million in June 2017. Domestic market capitalisation stood at UGX 4,300 billion at end June 2017, down 6.0% from June 2016. Total funds under management in the sector were UGX 2,062 billion (USD 559.1 million) in June 2017, up about 33% from 2016. The top three fund managers controlled 80% of total assets managed in June 2017. The breakdown of assets under management by asset class highlights the predominance of investments in government bonds, representing 58% of total assets managed.

Uganda is ranked Africa’s 13th bond market according to the African Financial Markets Initiative (AFMI).

Social Security

The pension benefit system in Uganda consists of several programmes.  Social assistance grants for empowerment are awarded to vulnerable people aged 65 and above who receive a monthly stipend of UGX 25,000 from government and development partner resources. The sector includes a National Social Security Fund (NSSF), which is a compulsory contributory scheme for all employers and employees, and a Public Service Pension Plan (PSPS), which operates under a defined benefit plan, managed by the Ministry of Public Service and financed directly by government's tax revenue. An armed forces pension plan exists and is fully funded by the government's tax revenue. Parliament employees benefit from a defined contribution pension plan with government guarantee. Social security also includes voluntary schemes consisting of complementary, employer-sponsored and generally contributory occupational schemes, and individual (non-employer) schemes established to cover informal sector workers or self-employed people.

The total assets of the sector as of end-December 2017 amounted to UGX 10,040 billion (USD 2.7 billion), or 10% of GDP. The sector is dominated by the NSSF, which in June 2016 accounted for 86% of total assets. The sector's total investment portfolio was UGX 9,900 billion (USD 2.6 billion), up 23% from 2016. It is dominated by publicly traded securities and equities with shares that in 2017 stood at 71.1% and 15.4%, respectively.

The 2011 Regulatory Authority Act obliges approved stakeholders to comply with prescribed asset allocation for appropriate diversification of investments. The risk-based supervision approach was introduced in 2016 by the Regulatory Authority to better identify potential risks incurred by the various schemes. 

[1]      These 7 service providers are divided into four (4) mobile network operators (MTN, Airtel, Africell and Uganda Telecom through M-Sente) and three (3) non-mobile network operators (M-cash, Ezee Money and Micro-pay).

[2]      Interswitch is a financial technology company providing inter-connectivity between banks, mobile money networks and other financial service providers.

[3]      These 17 institutions comprised 13 commercial banks, 3 credit institutions, 1 deposit-taking MFI and 2 mobile network operators (M-cash and MTN).

Contact Details Information of Banks Operating in Uganda - 2018







 Colline House Plot 4
Pilkington Road
P.O.Box 21091 Kampala

 (+254) 200516600 / (+254) 414345200

 [email protected]


 Plot 2 & 4 Hannington

 (+254)  312

 [email protected]


 Plot 18, Kampala Road
P.o Box 7197 Kampala 

 (+254) 414236192

  [email protected]


 Plot 45, Jinja Road
P.O.Box 2750

 (+254) 414 30 20 01

 [email protected]


 Plot 37, Jinja Road

 (+254) 313400437 / (+254) 414341880


 Plot 30 Kampala Road
P.o Box 7052 Kampala

 (+254) 414230141

 [email protected]


 Twed Towers, Plot 10
Kafu Road, Nakasero –
P.O. Box
74827 Kampala -

 (+254) 312188400

 [email protected]


 Head Office
Mapeera House
Plot 44-46 Kampala

 (+254) 414346856

 [email protected]


 Centre Court Plot 4
Ternan Avenue P.o Box
7505 Kampala

 (+254) 312305500 / (+254) 414305500


 Plot 26 Kyadondo Road

 (+254) 414351000

 [email protected]


 Plot 17/19, DTB Centre,
Kampala Road
P.O Box 7155, Kampala

 (+254) 314387100

 [email protected]


 Plot 4 parliament
Avenue P.O Box 7368

 (+254) 312266078 / (+254) 312354100

  [email protected]


 Plot 390, Muteesa 1
Road, Katwe
P.O. Box 10184
Kampala, Uganda

 (+254) 772290000 / (+254) 772291000

 [email protected]


 Plot 6, Hannington Rd.
P.o. Box 36206,Kla

 (+254) 312302400

 [email protected]


 Plot 121 & 115,Block 6,
P.O.Box 6972, Kampala

 (+254) 414341275

 [email protected]


 Plot 56, Kira Road
P.O Box 7323, Kampala,

 (+254) 417718500 / (+254) 414233833

  [email protected]


 Investment House, Plot
4, Wampewo Avenue,

 (+254) 414 259 651/2

 [email protected]


 Sixth Floor,
Commercial Plaza,
Plot 7 Kampala Road,
P.O. Box 7399

 (+254) 417118200 / (+254) 414345751

[email protected]


 Rwenzori Towers
Plot 4/6, Nakasero
Box 28707 Kampala

 (+254) 312388100 / (+254) 312388155

 [email protected]


 Orient Plaza, Plot 6/6A
Kampala P.O.Box 3072

 (+254) 417719101

  [email protected]


 Crested Towers, Short
Tower 17 Hannington
Road P.o Box 7131
Kampala Uganda

 (+254) 417154600


 Plot 5 Speke Road
P.O. Box 7111, Kampala

 (+254) 200524100

 [email protected]


 Plot 27 Kampala Road
P.o Box 9485 Kampala

 (+254) 414313100

 [email protected]


 Plot 2 Jinja Road.
P.O Box 7396 Kampala,

 (+254) 417715100

 [email protected]



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At a Glance

At a Glance Source
Population in thousands (2019): 44,269.59
GDP per capita (current US$) 2019 - World Average 10,721.61: 776.76
Account (%) age 15+) - (2014 vs 2017): 44% | 59%
Agriculture Orientation Index - Credit ( Agriculture, Forestry and Fisheries share of GDP) (2015 vs 2016): 0.40 (2015)
Financial Inclusion Strategies: National Financial Inclusion Strategy 2017-2020
Domestic credit provided by financial sector (% of GDP) 2017: 23.16
Made or received digital payments in the past year (% age 15+) (2014 vs 2017): 40% | 55%
Remittances % of GDP for 2018: 0.044
Mortgage Interest Rate / Mortgage Term (years): 20% | 20

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Mar 29, 2023 | Nile Post - All Africa
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