Uganda: lending & credit regulation

Who regulates

• Bank of Uganda

  Primary supervisor of supervised financial institutions, including commercial banks, credit institutions, and microfinance deposit-taking institutions.

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Core laws & rules

• Financial Institutions Act (2004)

  Establishes the licensing and supervisory framework for financial institutions, including the regulation of credit reference bureaus and prudential standards.

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• Banking Act (1969)

  Provides the foundational legal framework for licensed banks and credit institutions, including licensing, minimum capital, and liquid asset requirements.

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Licensing & registration

• Supervised Financial Institutions (SFIs)

  Commercial banks, credit institutions, and microfinance deposit-taking institutions require licensing under the Financial Institutions Act 2004 and Banking Act 1969.

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• Credit Reference Bureaus

  Entities operating as Credit Reference Bureaus, such as GnuGrid CRB Limited, require licensing under the Financial Institutions Act 2004.

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Restrictions & warnings

• SFIs must submit monthly credit risk returns, loan-to-value data, and credit data to Credit Reference Bureaus. Insider lending is capped and must be on non-preferential terms with collateral valued at least 120%.

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• Credit concentration is limited to 25% for single borrowers, and loans must be classified into five risk tiers with specific provisioning ranging from 20% to 100%.

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Direction of travel

• The regulatory environment is moving towards greater financial inclusion and data transparency, evidenced by the licensing of new credit bureaus and mandatory credit reporting for all participating institutions.

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Sources

1. Bank of Uganda Instructions for SFI Monthly Credit Risk Return · 2023-01-01
2. Instruction Notes for the Compilation of the Loan-to-Value and Mortgage Data Return · 2022-10-01
3. Bank of Uganda Instructions for the Monthly Credit Risk Report · 2022-10-01
4. Bank of Uganda Bank Lending Survey October to December 2021 · 2022-06-01
5. Licensing of GnuGrid CRB Limited · 2022-06-01
6. Bank of Uganda COVID-19 Credit Relief and Loan Restructuring Measures for Education and Hospitality Sectors · 2022-06-01
7. Invitation to Half-Day Small Business Recovery Fund Workshop for Participating Financial Institutions · 2022-06-01
8. Small Business Recovery Fund Credit Reporting Guidelines · 2022-06-01
9. Submission of Data to GnuGrid CRB Limited · 2022-06-01
10. Bank of Uganda Credit Relief Implementation for Education and Hospitality Sectors · 2022-06-01
11. Bank Lending Survey January to March 2022 · 2022-03-01
12. Financial Institutions (Consolidated Supervision) Regulations, 2010 · 2010-01-01
13. Financial Institutions (Insider Lending Limits) Regulations, 2005 · 2005-01-01
14. Financial Institutions (Limits on Credit Concentration and Large Exposures) Regulations 2005 · 2005-01-01
15. The Banking Act 1969 · 1969-01-01