By Silvia Nyambura
Uganda’s banking sector is not out of the woods yet with slow growth of assets, deposits and loan uptake continuing to plague the industry. This is according to the annual Uganda Banking Sector analysis report released by African Alliance. The report shows Deposits grew by 12 percent to Ushs 11.5 trillion while industry loan growth slowed to 7 percent with outstanding loans closing at Ushs 8.3 trillion. Arthur Nsiko a research analyst at African Alliance says this was attributed to a slowdown in foreign currency loans which grew by 6.8 percent in 2013 compared to 56 percent in 2012.
Industry Non-Performing Loans (NPLs) grew to 6.9 percent from 4.2 percent in the previous year. The building and real estate sector continues to have the largest share of credit followed by the trade and communications sector. Credit to these sectors however declined by 13 percent and 17.9 percent respectively in the same period.
Addressing the media at the company’s offices in Kampala on 22nd September 2014, Nsiko noted there is a shift in the lending sector.
“Banks are shifting their lending strategy towards increasing credit to households because they have a lower NPL ratio. The household and personal loans sector recorded the fastest growth rate growing by 40 percent compared to a decline of 14 percent in 2012,