Introduction

Following sweeping financial reforms in the 1990s, Uganda’s banking landscape entered a dynamic period of expansion, diversification, and modernization. From 2000 onwards, commercial banks multiplied, market competition intensified, and digital innovation reshaped how Ugandans engage with financial services.

1. Expansion in Numbers and Market Reach

• As of December 2024, Uganda had 22 fully licensed commercial banks operating nationwide, following the reclassification of three banks to Tier II status due to capital requirements Business FocusWikipedia.
• By mid-2025, some sources indicated there were 24 commercial banks, citing recent regulatory updates and the entrance of new players The African Exponent. The sector reflects both consolidation and evolving competition.

2. Increased Deposits, Lending, and Assets

• Customer deposits soared to approximately UGX 35.17 trillion in 2024—up 97% from 2023—though just five banks (Stanbic, Centenary, Absa, Equity, and Dfcu) held nearly 56% of these deposits Business Focus.
• Lending also saw robust growth: commercial banks extended UGX 21.46 trillion in loans in 2024, up from UGX 20.26 trillion in 2023 Business Focus.
• As of mid-2024, total banking sector assets reached UGX 49.5 trillion, representing a 342% increase from the previous year; the top 10 banks controlled approximately 81% of assets Business Focus.

3. Capitalization and Regulatory Resilience

• In 2022–2024, the Bank of Uganda raised the minimum paid-up capital for commercial banks from UGX 25 billion to UGX 150 billion by mid-2024. This sweeping requirement triggered some restructurings, with one voluntary exit, two closures, and three downgrades to Tier II Monitor.
• By March 2025, the sector displayed strong financial health. Banks earned a combined net profit of UGX 1.689 trillion in FY 2024/25 MonitorKikubo Lane. Capital adequacy ratios stood at 25.4% for commercial banks, well above the regulatory minimum MonitorKikubo Lane.

4. Digital Transformation and Financial Inclusion

• Digital banking witnessed rapid growth:
  • Real-Time Gross Settlement (RTGS) transaction volumes rose 22.3%, and values by 21.6%
  • Automated Clearing House (ACH) transactions grew 3.4%
  • Cheque usage declined to just 7.1% of total transaction value MonitorKikubo Lane
• Mobile money surged to 33.7 million active accounts (a 166% increase) with low-value transactions under UGX 50,000 making up 92.2% of activity. Digital lending skyrocketed to UGX 2.9 trillion across 102 million loans MonitorKikubo Lane. Agent banking networks expanded by nearly 49%, despite some operational challenges MonitorKikubo Lane.

5. Key Players: Domestic Systemically Important Banks (D‑SIBs)

• Uganda’s banking landscape is now anchored by six D‑SIBs—Stanbic, Standard Chartered, Centenary, Dfcu, Absa, and Equity. These banks collectively hold nearly 50% of total banking assets, and are subject to enhanced regulation due to their systemic importance MonitorKikubo Lane.

6. Branch Network & Access

• While urban branch networks remain robust, rural penetration remains a challenge. In 2023, Uganda had approximately 2.26 commercial bank branches per 100,000 adults, according to World Bank data Trading Economics. The focus continues shifting toward digital channels and agent-driven outreach.

7. Market Entry and Innovation

• New entrants—including NCBA Bank Uganda, launched in 2014—reflect regional integration and cross-border expansion Wikipedia.
• Environmental trends like Islamic banking emerged with the licensing of Salaam Bank, signifying diversification in financial offerings Reddit.

8. Summary Table: Key Metrics Over Time

Metric	Approx. Value	Year/Period
Licensed Commercial Banks	22–24	2024–2025
Industry Deposits	UGX 35.17 trillion	2024
Loans Disbursed	UGX 21.46 trillion	2024
Total Assets	UGX 49.5 trillion	2023
Net Profit (Banks)	UGX 1.689 trillion	FY 2024/25
Capital Adequacy (Banks)	25.4%	March 2025
D‑SIB Asset Share	~50%	FY 2024/25
Branches / 100k adults	2.26	2023
Mobile Money Accounts	33.7 million	FY 2024/25
Digital Lending Volume	102 million loans, UGX 2.9 trillion	FY 2024/25

Conclusion

Since 2000, Uganda’s commercial banking sector has undergone significant transformation. The number of banks has increased, their capital and profitability have strengthened, and digital channels have expanded financial inclusion. Yet, the ongoing challenge remains achieving deeper outreach, especially in rural communities, while innovating to meet diverse customer needs.