Financial Sector Development

Uganda’s national financial system comprises of financial institutions (formal, semi-formal and informal), financial markets, and the payment systems, which together enable the exchange of goods and services and the allocation of capital. The formal financial institutions include Commercial Banks, Microfinance Deposit-taking institutions and Credit Institutions.

Uganda’s vision is to attain a well-developed financial sector, resilient to both internal and external shocks as well as increase access and usage of financial services. Financial deepening is expected to lead to a better transmission of monetary policy, contribute to financial stability in the economy and foster the soundness and efficiency of the financial system and its processes. In an effort to increase financial inclusion, Government has developed and implemented a number of policies and strategies within the financial sector namely; National Microfinance Policy, National Financial Inclusion Strategy, Financial Literacy Strategy and National Payment Systems Policy. Other policies in the pipeline include the National Agriculture Finance Policy, and revised Financial Literacy Strategy.

Launched in 2008, the goal of the National Microfinance Policy is to extend access to microfinance across the country. The policy targets increasing access to finance by raising capacity in and improving regulation and supervision of microfinance. The enactment of the Financial Institutions (Amendment) Act in 2016 by Parliament facilitated the deepening of Uganda’s financial sector by providing an enabling legal and regulatory framework for the provision of new financial products and services by Banks namely Agent Banking; Bancassurance; enhanced access to Credit Reference Bureau services; reforms in the Deposit Protection Fund; and Islamic Banking. Furthermore, to facilitate the use of movable assets such as vehicles as collateral for loans, Parliament of Uganda passed the Security Interest in Movable Property Act, 2019.

In addition, Bank of Uganda in collaboration with Ministry of Finance Planning and Economic Development launched the National Financial Inclusion Strategy (NFIS 2017 - 2022) in 2017, with the overall vision to foster access to and use of a broad range of quality and affordable financial services which help ensure financial security of all Ugandans. The strategy aims at reducing financial exclusion and access barriers, developing credit infrastructure, building out the digital infrastructure for efficiency, and empowering and protecting individuals with enhanced financial capability.

Government with support from the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) has finalised Uganda’s first locally developed set of Insurance and Pension Mortality Tables. The Mortality tables are aimed at ensuring price stability in the Insurance and pension Sector by hedging against over or under pricing of Insurance and Pension Products. Regarding Uganda’s Capital Markets’ Development, Government has continued with the implementation of the Capital Markets Master Plan (2016/17-2026/27) launched in June 2017. The Master Plan is a comprehensive plan that seeks to chart the strategic positioning and future direction of Uganda’s capital markets with the view to grow the markets and attract more international capital to meet the long term financing needs of the economy.

The above reforms achievements have led to growth in domestic market capitalization, increased access to finance, and improvement in financial inclusion.



  1. Overall financial inclusion in Uganda was recorded at 78% of the adult population in 2019, an increase from 54% in 2006. Out of this, formal financial inclusion accounted for 58% compared to 28% in 2006.
  2. The share of credit to the agricultural sector increased from 10.04% in 2015 to 13.33% in FY 2019/20. In addition, the number of beneficiary farmers under the Uganda Agriculture Insurance Scheme reached 174,806 by December 2019.
  3. Private Sector credit as a percentage of GDP increased from 11.7 percent in FY 2017/18 to 12.3 percent in FY 2019/20.