Business 27 May 2026 Daily Monitor (Uganda)
Uganda's Digital Lending Booms, Repayments Keep Pace Amidst Rising Risks
Uganda's digital lending sector experienced a massive surge in 2025, with loan disbursements and repayments nearly matching each other, indicating robust credit circulation despite an increasing non-performing loan ratio. Source: https://www.monitor.co.ug/uganda/business/markets/digital-borrowing-is-exploding-repayment-looks-good-as-well-5475710
The digital lending landscape in Uganda is experiencing unprecedented growth, as highlighted by data from the Bank of Uganda for the year ending December 2025. Loan disbursements through mobile money platforms escalated significantly, driven by a strong demand for quick, accessible credit. Transaction volumes for digital loans soared by 352.8 percent to 306.3 million, with the total value disbursed nearly doubling to Shs4.8 trillion.
Encouragingly, repayment activity closely tracked this expansion. Repayment transactions reached 291.9 million, representing approximately 95.3 percent of the disbursement volume. In terms of value, Shs4.9 trillion was repaid, slightly exceeding the Shs4.8 trillion disbursed. This indicates strong liquidity recycling within the mobile lending ecosystem, with repayments effectively covering new lending and reducing existing debt.
However, this boom is not without its challenges. The non-performing loan ratio for digital credit climbed to 37.3 percent by the end of 2025, up from 32.3 percent the previous year. This elevated risk profile is characteristic of unsecured, instant mobile lending. The divergence between high overall repayment volumes and a rising non-performing loan ratio points to uneven performance at the individual borrower level, necessitating careful risk management by lenders and payment service providers.
The underlying mobile money infrastructure continues to expand, supporting this growth. The number of registered agents increased by 27.5 percent, enhancing accessibility, while active users grew to 36.3 million. Overall mobile money transaction volumes and values also saw substantial increases, underscoring its integral role in Uganda’s financial activities.
This expansion underscores the critical role of digital finance in Uganda, facilitating credit access while also presenting new challenges in credit risk management. The sustained high repayment rates are a positive sign for the sector’s stability, but the rising non-performing loan ratio warrants attention from regulators and financial institutions alike.
Source: Daily Monitor (Uganda)