Credit growth in Uganda’s private sector fell to its slowest pace in three months in October as agriculture and telecommunications loans dropped relative to the previous month.
Commercial bank loans to the private sector increased by 10.1% year on year in October, down from 12.2% growth in September, according to data from the Bank of Uganda. It is the lowest growth rate in three months, although private sector credit extension rather picked up in August and September; September’s growth was a 32-month high.
Month-on-month, total private sector lending decreased by 0.2% in October compared to increases of 1.3% and 2.5% in August and September, respectively. This was mainly due to a 1.1% fall in month-on-month lending to agriculture and a decrease in transport and communication credit of 3.9%.
The growth of private sector credit in the year to October was driven by trade credit growth, a rise in building, mortgage, construction and real estate loans, and an increase in personal loans and household loans.
Trade credit rose 13.7% year on year and was supported by an increase in lending to retail and wholesale trade. Lending to the building, mortgage, construction and real estate sector increased by 10% in October compared to the same month year, largely due to a rise in loans to property developers and estate and letting agents, and residential mortgages.
Personal loans and household loans were up 10.8% year on year on the back of a 27.4% increase in loans for the purchase of non-durable goods (consumables) and services.