louis kasekende : uganda ’ s financial sector at 50 – achievements, challenges and expectations for the future speech by dr louis kasekende, deputy governor of the bank of uganda, at the uganda institute of banking and financial services annual dinner, kampala, 1 march 2013. * * * chief executive officer, uganda institute of banking & financial services chief executives of commercial banks invited guests ladies & gentlemen i would like to begin by thanking the uganda institute of banking and financial services for graciously inviting me to speak at this occasion, where we will celebrate 50 years of achievements by the banking and financial services industry in uganda and look ahead to the challenges that the industry will confront in the future. i also want to commend the institute for the excellent work it is doing, especially through professional training of staff ; training which is critical to helping the industry meet the exacting demands of a modern economy in which technology and markets are evolving at a rapid pace. in these remarks i would like to highlight the most notable achievements of the banking industry since the start of the millennium and then go on to identify what i believe are some of the most pertinent challenges that the industry must face in the years ahead. the banking industry in uganda can take pride in four major achievements since the start of this millennium ; achievements which have brought important benefits for the wider economy and the ugandan public. the first achievement i want to highlight is the dramatic increase in the intermediation of funds ; the extent to which banks convert the deposits that they mobilise into loans to the corporate and household sectors. in the 1990s, uganda was a very low intermediation banking system. at the end of the year 2000, commercial bank credit to the private sector was only six percent of gdp and banks only lent out 54 percent of their deposit base to the private sector. by the end of 2012, 80 percent of the banks ’ deposit base had been lent out to the private sector and private sector credit as a share of gdp had risen to 15 percent. in the twelve years since the end of 2000, bank lending to the private sector has risen five fold in real terms. the second impressive feature of the performance of the banking industry in recent years is the expansion of the branch network. in the year 2000, there were 129 bank branches in uganda. at the end of last year this had risen to 495, a four fold increase. in the last five years, uganda has seen an average of 60 new branches

bank of uganda remarks by prof. emmanuel tumusiime - mutebile, governor, bank of uganda uganda bankers ’ association annual bankers ’ conference july 19, 2017 the keynote speaker, prof. njuguna - ndugu, emeritus governor of the central bank of kenya, the chief executives and senior staff of banks present, the senior management of the uganda institute of banking and financial services, distinguished guests, ladies and gentlemen. good morning to you all. let me begin by commending the uganda bankers ’ association for organising this inaugural annual bankers ’ conference. we have a very busy schedule of sessions on a variety of important topics to look forward to today. in my brief remarks i would like to outline what i believe are some of the key challenges for the ugandan banking industry in the years ahead. page 2 of 14 as will become clear, these challenges are in some respects interrelated, as progress in one area will make it easier to make progress in others. a major challenge for the banking industry ; one which is of the greatest importance for the rest of the economy, is how to strengthen bank lending to the private sector. bank lending expanded rapidly in the first decade of this century ; in real terms the stock of credit expanded four - fold between 2001 and 2011, and this enabled many new borrowers to access credit. but since 2011 credit growth has slowed and over the last two years, there has been virtually no growth in real terms ( after adjusting for inflation ). page 3 of 14 the main reasons for the stagnation of bank lending lie on the supply side of the credit market. over the last five years, since the first half of 2012, loan demand, as proxied by the value of loan applications received by banks, has grown robustly, by about 17 per cent per annum in real terms, but the value of loans actually approved by banks has grown much more slowly. consequently, whereas in the first half of 2012, banks approved loans in value amounting to 70 per cent of the total loan applications that they received, that figure had fallen to 51 per cent in the first four months of 2017. it is clear that, against a background of rising nonperforming loans and difficulties in realising the value of loan collateral in property markets, banks have become much more wary about the creditworthiness of loan applicants and as a result have become more reluctant to extend credit to them. page 4 of 14 unfortunately, the pool of prime borrowers –