Similarly, the value of loan applications rose to 4.9 trillion Shillings in the quarter to October from 3.7 trillion Shillings in the quarter to July 2021. This improvement in the demand and supply reflects improved economic activity following the easing of the lockdown towards the end of the year, with both having declined in the earlier part of the year.
Trade took 31 per cent of the loans while those borrowing to build or buy homes and buy land came in second taking up 25 per cent of loans in the month. The trade sector includes retailers, wholesalers, exporters, and importers.
In Uganda’s free market economy, private sector spending and growth is crucial for economic growth and development, a thing achieved through increased loans.
The Bank of Uganda is pushing for the strengthening of domestic demand in order to steer the country towards a real Gross Domestic Product (GDP) growth of five percent in 2012/13. The economy grew just 3.4 percent in 2011/12, way below the expected six percent.
