The value of loans approved in January fell to 533.9 billion shillings – Finance
The Ministry of Finance, Planning and Economic Development in its February 2021 economic report said the value of loans approved in January for the private sector had fallen to 533.9 billion shillings from 1.198 trillion shillings. approved the previous month.
The ministry says there was a reduction in credit applications and approvals in January, in part due to service disruptions resulting from election-related activities.
During the period, the finance ministry said outstanding private sector credit increased 0.4 percent to 17.911 billion shillings in January 2021 from 17.845 billion shillings the month before.
The ministry explains that the slowdown in growth from 2.2% recorded in December 2020 was due to the drop in the value of loans approved during the month and partly reflects weak private sector economic activities around the election period.
In the December 2020 economic report, the Ministry of Finance said there had been an increase in the growth of outstanding credit to the private sector to 2.1% in December 2020 from 0.8% recorded in November. 2020, due to the continued upturn in economic activity.
Breaking down by sector in the February economic report, the Ministry of Finance indicates that, by sector, personal loans and bad credit loans to households received the largest share of credit approved in January 2021 at 25.2%, followed by commerce (19.4%) and agriculture (13.6%). hundred).
Mining and quarrying 0.2 percent, business and community, social and other services 13.5 percent.
Building, mortgages, construction and real estate 9.8 percent, transport and communications, electricity and water 10.7 percent, manufacturing 7.6 percent.
In February 2021, the Bank of Uganda kept the central bank (CBR) rate at 7%, with inflationary pressures expected to remain subdued in the coming months. The weak CBR should support the process of economic recovery.
The finance ministry said in the report that commercial banks’ shilling-denominated lending rates declined slightly in January 2021, declining slightly to a weighted average of 17.4 percent from 17.5 percent in December 2020.
“This move is partly attributed to the accommodative stance of monetary policy and the decrease in credit risks,” the finance ministry said in the February 2021 economic report describing the development that took place in January. 2021.
Adding: “Likewise, rates on foreign currency lending fell from a weighted average of 5.6% to 4.7% during the same period.”
In government securities, which include treasury bills and treasury bills that the government issues through the Bank of Uganda to finance fiscal operations due to the deficit in domestic tax revenue collection.
The Ministry of Finance explains that during the month, there were 2 auctions of treasury bills and 2 auctions of treasury bills on the primary market. 1.508 trillion shillings (at cost) was raised, of which 532.47 billion shillings came from treasury bills and 975.65 billion shillings came from treasury bonds.