Understanding Banking in Uganda and Its Institutions

Uganda has a relatively well-developed banking sector, with a number of commercial banks operating in the country.

The banking sector in Uganda is regulated by the Bank of Uganda, which is the country's central bank.

The Bank of Uganda was established in 1966 and is responsible for maintaining the stability of the country's financial system.

Commercial banks in Uganda offer a range of services, including deposit accounts, loans, and credit cards.

Uganda's banking sector is dominated by large, well-capitalized multinational banks. Most of these banks are foreign-owned, which has a significant impact on the country's financial landscape.

The country has a fully independent deposit protection fund, which insures each bank account up to a maximum of about $3,600. This fund is supported by commercial banks, which contribute 2% of the previous year's average deposits to it.

Many Ugandans use mobile money transactions more than they have formal bank accounts, which highlights the country's reliance on alternative financial services.

The asset allocation among commercial banks in Uganda is quite interesting. As of December 2022, the total assets in Uganda's banking institutions were valued at USh45.44 trillion, which is approximately US$12.3 billion.

The 10 largest commercial banks in Uganda accounted for a significant 82.18 percent of total banking assets at that time. This means that a small group of banks holds a substantial portion of the country's banking assets.

The top five banks held a combined market share of 57.54 percent of total national banking assets. This highlights the dominance of a few large banks in the Ugandan banking sector.

The remaining 15 commercial banks in Uganda held 17.82 percent of total banking assets, indicating that there is still room for smaller banks to grow and compete in the market.

By June 2023, the total banking assets in Uganda had increased to USh48.3 trillion, which is approximately US$12.9 billion. This growth suggests that the banking sector in Uganda is expanding and evolving over time.

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After 2010, the banking sector in Uganda underwent significant growth. The number of commercial banks increased to 23 by April 2011.

The bank branches in the country numbered over 400, employing over 8,700 people. Total commercial bank assets in the country were valued at more than USh 11 trillion.

In 2012, the Bank of Uganda closed the National Bank of Commerce (Uganda) and transferred its deposits to Crane Bank. The total number of commercial bank branches reached 500 in November 2012.

The Bank of Uganda estimated the total banking assets in the country at USh 14.4 trillion in June 2012. By June 2013, total commercial bank assets had increased to USh 15.7 trillion.

By 30 June 2014, total banking assets had grown to USh 18.6 trillion. As of 31 December 2015, total banking assets in the country were USh 21.7 trillion.

The Bank of Uganda reported total banking assets at USh 24.9 trillion as at 30 June 2017, with 7.4 million commercial bank accounts in the country. There were 546 bank branches and 818 ATMs in Uganda at that time.

As of June 2019, the Uganda Deposit Protection Fund reported total banking assets in the country at USh 30.3 trillion. The total banking sector loan portfolio had a 3.48 percent non-performing loan ratio.

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The regulatory framework in Uganda is designed to ensure the stability and soundness of the banking sector. Several commercial banks were newly licensed between 2007 and 2010, including KCB Bank Uganda Limited and Ecobank.

The central bank directed all commercial banks to raise their minimum capital to USh 10 billion by March 2011 and to USh 25 billion by March 2013. This move aimed to strengthen the banking sector and improve its resilience.

The Uganda Deposit Protection Fund became operational in 1997, providing deposit insurance to account holders. Each account is protected up to USh 10 million, and depositors must be paid within 90 days of a bank failure.

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Between 2007 and 2010, Uganda's banking sector underwent significant regulatory changes. Several commercial banks were newly licensed, including KCB Bank Uganda Limited, Equity Bank Uganda Limited, and GT Bank Uganda.

By 2009, total commercial bank assets in Uganda were estimated at USh 8.73 trillion. This growth was largely driven by accelerated branch expansion through mergers and acquisitions or new branch openings.

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In April 2009, Bank PHB, Nigeria's fifth largest bank at the time, bought 80 percent ownership of Orient Bank, Uganda's eighth largest commercial bank. This brought the number of Ugandan banks with major investments from Nigeria to three.

By October 2010, there were 22 licensed commercial banks in Uganda, with nearly 400 bank branches and almost 600 automated teller machines.

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The Uganda Deposit Protection Fund became operational in 1997 and is funded by premiums charged to every licensed deposit-taking financial institution in the country.

Each account is protected up to USh 10 million, which is a significant safety net for depositors.

The Depositor Insurance Law was enacted by Parliament and states that all depositors must be paid within 90 days of a bank failure.

The failing institution must be sold by the auctioning of its assets within six months of its seizure by the central bank.

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In Uganda, there are several types of financial institutions that offer a range of services to customers. As of 12 December 2024, there were 18 licensed credit institutions, including Tier II financial institutions.

These institutions include credit and finance companies that are authorized to accept customer deposits, establish savings accounts, and make loans. They are also allowed to trade in foreign currency, but only to a limited extent. For example, BRAC Uganda Bank Limited and Yako Bank Uganda Limited are both Tier II financial institutions that offer these services.

Some of the notable licensed credit institutions in Uganda include BRAC Uganda Bank Limited, Yako Bank Uganda Limited, Opportunity Bank Uganda Limited, Guaranty Trust Bank Uganda, ABC Capital Bank Uganda, and Pride Bank Limited. Here is a list of some of the Tier II financial institutions in Uganda as of 12 December 2024:

Commercial banks play a vital role in the economy, providing essential financial services to individuals and businesses.

They offer a wide range of products and services, including checking and savings accounts, loans, credit cards, and investment products.

Commercial banks are heavily regulated to ensure their stability and security, with requirements for maintaining a minimum level of capital and liquidity.

Their deposits are insured by government agencies, such as the FDIC in the US, to protect customers' funds.

Commercial banks generate revenue through interest on loans and investments, as well as fees for services like account maintenance and transactions.

Their stability and security are crucial for the overall health of the economy, as they provide a safe and reliable place for people to store their money.

Commercial banks also play a key role in facilitating economic growth by providing financing for businesses and individuals.

Investment banks and stock brokerage firms in Uganda play a vital role in facilitating financial transactions and investments.

The Capital Markets Authority regulates these institutions to ensure they operate within the country's laws and regulations.

Investment banks and stock brokerage firms in Uganda are required to be registered with the Capital Markets Authority.

They also need to be listed on one of the country's stock exchanges, such as the Uganda Securities Exchange.

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These regulations aim to protect investors and maintain a fair and transparent market.

Investment banks and stock brokerage firms in Uganda provide a range of services, including financial advisory, trading, and investment management.

Their primary goal is to help clients achieve their financial objectives, whether it's buying or selling securities, or raising capital for a business.

By choosing to operate in Uganda, these firms can tap into a growing economy and a growing middle class with increasing disposable income.

Development banks play a crucial role in Uganda's financial landscape, providing risk capital for economic development projects on a non-commercial basis.

There are two development banks in Uganda: the Uganda Development Bank and the East African Development Bank.

These banks are authorized to provide financing for various development projects, and their main goal is to promote economic growth and development in the country.

The Uganda Development Bank, for example, is located at www.udbl.co.ug, and the East African Development Bank can be found at www.eadb.org.

Both banks are dedicated to supporting development projects that have a positive impact on the community, and they work closely with other financial institutions to achieve this goal.

Here is a list of the two development banks in Uganda:

The credit bureau system in Uganda has undergone significant changes in recent years. In 2008, the Bank of Uganda registered Compuscan CRB Ltd as the first credit reference bureau in the country.

Compuscan CRB introduced the biometric identity smart card system, which has been used in the Ugandan financial industry. This system has improved credit risk assessment, allowing commercial banks to introduce new products like medium and long-term financing.

New products like car loans and mortgages have been introduced by most Ugandan commercial banks, thanks to the credit bureau. As a result, interest rates have dropped significantly, with some banks offering rates as low as 10 percent for their best customers.

The Ugandan regulators licensed an additional credit bureau, Metropol Credit Reference Bureau Limited, in 2015. Metropol has operations in several countries, including Kenya, Rwanda, Tanzania, and Uganda.

Here's a list of key events in the development of the credit bureau system in Uganda:

Uganda has a range of financial institutions, including tier II financial institutions and other licensed credit institutions.

Tier II financial institutions, such as BRAC Uganda Bank Limited and Yako Bank Uganda Limited, are not authorized to establish checking accounts or trade in foreign currency, but they can accept customer deposits and make loans backed with collateral or without collateral.

BRAC Uganda Bank Limited and Yako Bank Uganda Limited are two examples of tier II financial institutions licensed as of 12 December 2024.

Other licensed credit institutions include ABC Capital Bank Uganda Limited, part of ABC Bank Group, and Guaranty Trust Bank (Uganda) Limited, part of GTCO Group.

These institutions are authorized to accept customer deposits and make loans, but they also have certain limitations on their activities, such as not being able to trade in foreign currency.

As of 12 December 2024, there were 18 licensed credit institutions in Uganda, with 6 of them being tier II financial institutions.

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Here's a list of some of the tier II financial institutions licensed as of 12 December 2024:

Additionally, there were 2 microfinance institutions, FINCA Uganda Limited and UGAFODE Microfinance Limited, also licensed as of 12 December 2024.

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In Uganda, there are Tier IV institutions that are regulated by the Uganda Microfinance Regulatory Authority (UMRA). They're not allowed to accept deposits from the public.

These institutions offer loans to the public, but they can be backed with collateral or not. In 2008, it was estimated that there were over 1,000 such institutions in the country.

Some examples of Tier IV institutions in Uganda include Letshego Microfinance Uganda, Asaak Financial Services Limited, Hofokam Limited, and VisionFund Uganda Limited.

These institutions play an important role in providing financial services to the public, especially in rural areas where access to traditional banking services may be limited.

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Uganda's banking sector is quite impressive, with 26 commercial banks, one development bank, and several micro-deposit and credit deposit institutions. Most of these commercial banks are foreign-owned.

The banking system is also supported by a fully independent deposit protection fund, which insures each bank account up to a maximum of about $3,600. This fund is funded by commercial banks contributing 2% of the previous year's average deposits.

Many Ugandans prefer mobile money transactions over formal bank accounts, and for good reason - it's a convenient and accessible way to manage finances.

Uganda's banking sector is surprisingly robust, with 26 commercial banks and one development bank operating in the country.

Most of these commercial banks are foreign-owned, which has led to a concentration of large, well-capitalized multinational banks dominating the system.

Each bank account in Uganda is insured to a maximum of about $3,600, thanks to a fully independent deposit protection fund.

Commercial banks contribute 2% of the previous year's average deposits to the protection fund.

Many Ugandans are opting for mobile money transactions over traditional bank accounts, highlighting the country's growing mobile banking culture.

Uganda's commercial banks also offer "Agency Banking", which allows customers to make deposits and withdrawals at designated agents outside the bank's premises.

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Uganda has no foreign exchange controls affecting legitimate trade, which means businesses can freely bring in capital and repatriate profits without restriction.

You can exchange currency at forex bureaus, which are available in the country.

Citibank Uganda Limited is a commercial bank with operations that are exclusively focused on commercial banking.

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Uganda has a variety of development partners that play a crucial role in its economic development. These partners include commercial banks that are authorized to hold checking, savings, and time deposit accounts in local and international currencies.

Some of the notable development partners in Uganda include ABC Capital Bank Limited, Bank of Africa (U) Limited, and Absa Bank (U) Limited. These banks are authorized to buy and sell foreign exchange, issue letters of credit, and offer loans to customers.

Here are some of the development partners in Uganda: