How Ugandan Banks Are More Than Ready To Lend But Businesses Don't Want To Borrow, Bank Of Uganda Speaks

Uganda’s commercial banks are increasingly ready to lend money to businesses, but many companies are becoming reluctant to take up loans, according to the latest Bank of Uganda surveys.

The findings from two surveys covering the quarter ended September 2026 show a growing gap between banks’ willingness to provide credit and businesses’ appetite to borrow.

The Bank of Uganda Credit Demand Survey, which captures the views of borrowers, indicates that businesses are becoming more cautious about taking on new debt amid high lending costs and difficult operating conditions.

At the same time, the Bank Lending Survey, which captures the views of commercial banks, shows that lenders are competing for quality borrowers and expect demand for credit to increase in the coming months.

The situation has created an unusual disconnect in Uganda’s credit market, with banks seeking to expand their loan portfolios while businesses are holding back from borrowing despite the availability of credit.

Businesses have cited high interest rates and challenging economic conditions among the factors affecting their willingness to seek new loans. For many companies, taking on additional debt is seen as risky when operating costs and financial pressures remain high.

The Bank of Uganda surveys suggest that this trend could continue, with businesses signalling that their appetite for borrowing may weaken further by December even as banks anticipate stronger demand for credit.

The findings highlight the challenge facing Uganda’s financial sector: having money available for lending does not necessarily translate into increased borrowing. Banks may be ready to lend, but businesses will only take up the credit when they are confident that the cost and risks of borrowing are manageable.