Personal loans decline in Uganda

Mar 28, 2011

The number of individuals borrowing from commercial banks is declining in Uganda, it has been revealed.

According to the Bank of Uganda (BoU), there has been a year-on-year reduction of 11 per cent in the number of personal loans taken out, the Daily Monitor reports.

There has also been a consecutive six-month decline.

Furthermore, there are concerns about the interest gap between household and corporate lending, which remains at the high level of 14 per cent.

Speaking in Kampala recently, BoU Director of Research Dr Adam Mugume said this continual fall does not favour consumer-led economic growth.

Previously, this type of lending accounted for 23 per cent of commercial bank loans in the Ugandan credit market, however this figure has now been revised downwards.

This comes after the same news provider reported that the Uganda Chamber of Commerce has gone into partnership with the Uganda Revenue Authority to promote the country's e-tax payment system.