Uganda lending rates highest in East Africa

Commercial bank lending rates in Uganda are the highest in East Africa leading to lower than projected credit growth and climbing non-performing loan ratios, according to a New Vision survey.

The average shilling commercial bank lending rate in Uganda hit 23% in July, from 22%, and to some extent; rigidities in the Financial Institutions Act are to blame.

Kenya’s average commercial bank lending rate for the six most dominant banks is at 17% for the country’s 43 licensed commercial banks. The average lending rates in the country usually average between 12% and 15%.

Tanzania’s highest prime rates are just at 21%, many commercial bank lending rates in the country are below this point. 

Lending rates in Rwanda and Burundi are safely below the 20% mark. Experts argue that infrastructure and structural issues are partly to blame for the high rates in Uganda.

EABC