Banks have continued to loosen up their lending rates in a bid to attract the private sector to borrow from them.
Although the change in the prime lending rate is still high compared to the Central Bank Rate (CBR) which is at 9.5 per cent, commercial banks are responding gradually to the CBR movement.
In response to the October monetary policy statement by the Bank of Uganda (BoU) and the decision to reduce the CBR by 0.5 percentage points to 9.5 percent, Stanbic Bank has reduced its Prime Lending Rate (PLR) from 18 per cent to 17.5 per cent.
As a result, Stanbic now has the lowest prime lending rate of all commercial banks active in Uganda’s credit market.
Mr Sam Mwogeza - Chief Financial Officer Stanbic Bank said they have consistently matched the movements of the CBR each time the Central Bank has made an adjustment.
“Stanbic Bank has now reduced its PLR eight times since the easing of the monetary policy was started 18 months ago,” he says.

Low credit demand
Speaking during the 25th edition of the Joseph Mubiru Memorial Lecture in Kampala last week, Mr Wilbrod Owor, the executive director Uganda Bankers Association, said commercial banks have failed to lend nearly Shs2 trillion to the private sector due to low demand for credit.
The credit uptake has dropped from 15 per cent to 6 per cent according to official figures, which experts fear could roll back the projected economic growth of 4.9 per cent for this year.