It was clear that the country’s Financial Sector may not release up to 5 Trillion shillings to the Private Sector by way of Credit Supply. An assessment by the Sector Regulator revealed. “What we have seen is that credit growth over the last 1 ½ years has been very weak, extremely weak. So we’ve had an interest in analyzing as to why credit growth has been weak, we have established that it is not demand constrained, the public; the borrowing public wants to borrow. The major constraints are on the supply side of credit.” Said, Dr. Louis Kasekende – Deputy Governor, Bank of Uganda.
A cross-section of financial service providers admitted that a host of fundamentals within the economy regionally and beyond played an advanced net effect on the motivation to lend. “Certainly, it is inductive of inefficiency in the market. Once the market is very efficient, the spreads will always narrow and once everything is okay you won’t see such variations. 2018 has not been an easy year, there has been a lot of issues, and business has slow down for a number of reasons.” Said, Kasim Nakibinge – MD, Cairo International Bank. According to Bank of Uganda’s latest review of the industry’s financial intermediation, an anticipated buildup of credit supply to at least 19 Trillion shillings up from the current levels of 12 Trillion was off the target. “Because taking 2016/2016 credit growth was about 15% when you look at credit growth on an annual basis to September 2017 we are looking at credits which are only 6%. So it has dropped from 15% to 6% and it would be extremely difficult for us to support the economy for the business sector to take advantage of this improved environment if the commercial banks are not playing their role.” Said the Deputy Governor Bank of Uganda.
Dr. Kasekende was speaking immediately after opening a new outlet by Cairo International Bank at a City Shopping Mall in Kampala. “We are going to offer digital products this is especially for the young clientele and the sophisticated class who believe in armchair banking but we are not losing sight of the traditional bankers who always want to go and walk into branches to transact.” Said the MD Cairo International Bank.
