2. Access to Credit – Strong
2.1 Banks
2.2 Other Sources
2.3 Credit Bureau
In-Country Assessment Information

2. Access to Credit – Strong

Goal – An efficient, transparent financial sector that provides a broad range of citizens with access to multiple forms of competitive credit so that they can start businesses, build wealth, and purchase property

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2.1 Banks


Core Question: Are traditional banking services robust and extensive enough to serve the needs of the population to help them build wealth and purchase property?  Yes – Strong, the authorities have introduced several reforms to strengthen public financial management and deepen financial markets.



2.1.1   How easy is it to obtain a bank loan? Strong – Ranking  60th out of  144; Score  3.0 out of 7



2.1.2   How sound are the country’s banks?  Strong – Ranking  68th out of  144; Score  5.2 out of 7

Source: The Global Competitiveness Report  2012-2013, World Economic Forum


2.1.3  Microlending

Status – Very Strong   Microfinance allows citizens without traditional creditworthiness to build a credit history. How many microfinance institutions are operating in the country? 11

BRAC Uganda
Centenary Rural Development Bank
Faulu Uganda
Uganda Finance Trust, Ltd.
FINCA Uganda What is the number of active borrowers per institution?

BRAC Uganda                               107,552
Centenary                                      11,035
Uganda Finance Trust           22,699
FINCA                                                54,763

Source: Microfinance Information Exchange



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2.2 Other Sources


Core Question: Are entrepreneurs free to raise capital outside the banking system including venture capital and/or by issuing stock in a well-regulated stock exchange? No – Weak, the financial sector has become more open but credit is still not easily available in rural areas.


Financial Freedom

2.2.1   How much control does the government exert over financial services? Weak for entrepreneurs – Score 50 out of 100 –  Considerable government control

Source: Index of Economic Freedom, Heritage Foundation


Venture Capital

2.2.2   How easy is it for entrepreneurs to find venture capital?
  Weak –  74th out of  144; Score 2.5out of 7


Equity Investors

2.2.3   How easy is it to raise money by issuing shares on the stock market?  Strong – 68st out of  144; Score 3.5 out of 7

Source: The Global Competitiveness Report  2012-2013, World Economic Forum


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2.3 Credit Bureau


Core Question: Is comprehensive credit information available through public and private credit bureaus?  Yes– Strong. Since Central Bank launched a credit bureau in December of 2008, it has been improved a lot even though public credit registry coverage is still not available now.

Overall Ranking  40th out of  185



2.3.1   What is the depth of information available in credit bureaus?  Very Strong – Score – 5 out of 6 with a higher number indicating more information is available



2.3.2   What is the extent of public credit registry coverage? Very Weak – not available



2.3.3   What is the extent of private credit registry coverage?   Weak –3.7% of adult.

Source: Doing Business 2013 – Getting Credit, World Bank



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In-Country Assessment Information (as of June 2007)

FQ 4.  How available are mortgage loans for purchasing property, who is the typical user and what are the prevailing trends?

Uganda’s housing finance sector has substantially grown from one government owned institute to 4 commercial banks and 1 Micro-finance Deposit taking Institution. The sector is however small in relation to the housing needs of the country and it has principally been serving the middle and higher income earners. The average mortgage loan size issued by commercial banks is between UShs 60 (US $ 34,000) and 80 million (US $ 46,000), an amount too high for the low income earners.

Absence of adequate housing finance for the last 30 years and the weak foundations made by consecutive governments in building the country’s housing industry have greatly crippled the formal private sector to such an extent that their contribution to housing delivery has been relatively insignificant. The housing finance sector is still facing a major challenge of lack of long-term funding schemes within the domestic banking system and the nascent capital markets.

Out of 5.2 million households in the country, only 0.68% can access mortgage loans through commercial banks, 19.95% can access housing micro-finance loans through Micro-finance Deposit taking Institutions, 7.2% can access loans from Micro Finance Institutions and Savings and Credit Cooperatives, 10.3% can only access loans through Savings and Credit Cooperatives only and 62.3% have no access to financial services.

Housing demand in Uganda has been constrained by inadequate financial resources for both real estate developers and end buyers. The low income levels of most Ugandans have also constrained the demand side of housing.



FQ 5. What are the interest rates, term and loan-to-value ratios for available mortgages?

All the 5 commercial banks in the housing finance sector offer the following mortgage products:

(i) house construction, (ii) house completion, (iii) home improvement, (iv) purchasing of houses, (v) equity release and (vi) refinancing mortgage.

LTVs range from 70 to 80% for 20 year loans. Interest rates range between 16 and 19%. Housing Finance Bank and DFCU Bank are the largest players in the market and they partly source their long-term funds from the National Social Security Fund. Through initiatives pioneered by Stromme Foundation and Habitat for Humanity Uganda, Micro Finance Institutions are to start a housing micro-finance product in which they will lend to low income earners up to UShs 8 million (US $ 4,600), payable between 2 to 5 years.

Source: Access to Housing Finance in Africa: Uganda, FinMark Trust

IRPF Assessment August 2008


FQ 6.Are there any informal barriers to borrowing such as for women or minorities?

Women, Youth, the Poor, persons with disabilities and other disadvantaged groups will be accorded equal opportunities. The government will ensure that women, youth, the poor, the disabled and other disadvantaged groups will receive equal treatment as the rest of the citizens of this country. In particular, Government will ensure adequate and effective integration of gender concerns in all programs geared towards the implementation of this policy. The issues to consider will include the following:

Security of tenure especially for women, the poor and the disabled

Encourage participation of women and youth in land use decision-making, especially where they are directly or indirectly affected.

Promote positive changes in cultures and attitudes to support sustainable land use, equitable distribution and sharing of benefits.

Develop programs to improve skills of the poor so that they can make a gainful living from their land.

Marginalized groups of people are more likely to use land unsustainably and should therefore be given special attention.  There will be no discrimination against people living with debilitating illnesses.

Source: Ministry of Lands, Housing and Urban Development National Land Use Policy



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