Uganda: Banks Turn Away Borrowers to Avert Bad Loans

opinion

Kampala — A salaried employee with one of the telecommunication companies walked into a commercial bank to secure a loan at the end of July but to his surprise, he was turned away. He had been a customer of the bank for at least seven years. But the bank denied him a salary loan, asking him to wait for two months for a possible consideration.

In the first half of 2016, indicators are pointing to commercial banks slowing down on lending because of the increased risk profile of clients due to the headwinds in the economy. With the exception of foreign currency loans, the Shilling loans, which most businesses and individuals rely on, have been flat, according to statistics from Bank of Uganda (BoU).

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