The Ministry of Finance’s October Performance of the Economy report shows that despite an increase in interest rates, the value of granted credit has remained steady.
According to the statistics made public last week, the amount of credit that was allowed increased to Sh1. 4 trillion in September from Sh1. 14 trillion in August, representing an approval percentage of 58.9% as opposed to 56.9%.
The research highlighted that despite a rise in interest rates for loans denominated in both shillings and foreign currencies, the increase indicates stability in the private sector’s appetite for credit.
However, the data shows that from Sh20. 1 trillion in August to Sh19. 6 trillion in September, the stock of outstanding private sector credit fell by 2.5 percent. The Bank of Uganda stated in its October Monetary Policy Statement that the inflation outlook is still quite unclear and that the overall risk profile is primarily positive.