Ugandan banks' claims on government reach 65% of private lending
AnalysisMonday 26 October 2026
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.
Rising sovereign exposure on bank balance sheets bears on how much credit remains available to the private sector in Uganda.
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.
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.
