Journal study finds digital fiscal transfers reduce Uganda MDI credit risk
ReportSaturday 24 October 2026
An ARDL model on monthly data from September 2022 to July 2025 finds that higher MDI capital, deposits and e-money inflows reduce credit risk in Uganda's microfinance deposit-taking institutions. The study was published open access on 24 October 2026.
Evidence that digital government transfers stabilise microfinance deposit-takers is relevant to Uganda's regulator and digital lenders.
An Ecofin analysis reports that Ugandan banks' exposure to government debt reached 65% of their private sector lending in 2024. Government securities made up 30.4% of banking-sector assets in March 2025, up from 21% in 2019.
An IMF study finds Uganda's private credit-to-GDP ratio rose only 6.7 points between 2001-2005 and 2021-2025, against 13.3 in Kenya. It attributes high spreads largely to operating costs (59.1%) and rising government borrowing that crowds out private lending.
