Election fever fuels loan default risk in Uganda

Downtown Kampala. Banks in Uganda are warning of a rise in loan defaults in the last quarter of 2025, citing political uncertainty.

Photo credit: Morgan Mbabazi | Nation Media Group

Uganda is bracing itself for a spike in loan defaults in the final quarter of 2025, as political tensions ahead of the January 2026 general election fuel economic uncertainty and strain household and business finances.

A report by the Bank of Uganda (BoU) shows that enterprises and individuals are increasingly at an increased risk of failing to repay loans, due to reduced donor inflows, rising borrowing costs, and the fragile electoral climate.