Banking in Uganda

Significant progress has been realized in Uganda’s financial sector’s performance. This is attributed the liberal operating banking and foreign exchange policy with no restrictions. The government instituted several financial sector reforms geared towards improving the financial environment. The major reform involved liberalizing the sector to enable free participation by interested players- the financial institutions.
Financial institutions currently operating in Uganda can be categorized into 6 groups; Central Bank (Bank of Uganda); Commercial Banks; Credit Institutions; Insurance Companies; Foreign Exchange Bureaus; and Development Banks.
Uganda’s economic policy is completely liberal allowing the free operation of the market forces, with little interference and control by government in private sector operations. The Macro-Economic Policy framework has been increasingly improving over the years in favor of private sector led economic growth. The overall objective is to increase competition and efficiency in the financial sector.
Bank of Uganda
The Bank of Uganda (Central Bank) was established in 1996 to provide regulatory, supervisory and advisory functions in the financial sector as stipulated in the Financial Institutions Statute.. The statute stipulates that, the bank shall formulate and implement monetary policy directed to economic objectives of achieving and maintaining economic stability.
Commercial Banks
Commercial banks dominate the country’s financial sector and account for over 90% of the assets of the banking system. They are charged with providing banking facilities to the public and operate the payments mechanism. These include among others; the Uganda Development Bank, the African Development Bank, Centenary Bank, Stanbic Bank-Uganda, the Development Finance Company of Uganda- DFCU Bank, Housing Finance Bank, Baroda Bank, Standard Chartered Bank, East African Development Bank, Diamond Trust Bank, Barclays Bank, Crane Bank and many others.
Development Banks
Development Banks are responsible for mobilizing external funds from international, government, non-government agencies, which are then lent out for long term projects in agriculture, industry and infrastructure development. These include The OPEC Fund, the World Bank, USAID, DANIDA and several others. They have been able to mobilize substantial resources in form of commercial and concessionary loans, grants, and export credit from international institutions and other agencies.
Insurance Companies
The insurance industry is licensed, regulated and streamlined by the Uganda Insurance Commission as per the insurance Statute of 1996. They include among others Pax Insurance Co. Ltd, First Insurance Co. Ltd, AIG, Pan World Insurance Co Ltd and Statewide Insurance Co. Ltd.
According to research, it is observed that there is still need to reactivate life assurance security business in the country not only for its social and economic security values to the policy holders but also for a greater mobilization of investible funds for the money markets and insurers own investment.