The value of new loans to the real estate and construction sector rose from $31 million in August 2023 to $43 million in September 2023.
Signs of financial distress among property owners, increase in prime property valuations and strong demand for small plots in large residential estates, triggered a sharp growth in loans to the real estate sector last year.
While key economic sectors registered increases in the value of new loans disbursed by commercial banks, credit flows directed at the real estate and construction sector recorded superior growth momentum between August and October 2023.
The value of new loans to the real estate and construction sector rose from Ush119 billion ($31 million) in August 2023 to Ush166 billion ($43 million) in September 2023, despite sectoral challenges associated with low occupancy rates recorded in many shopping malls, widespread cases of defaulting tenants and increased foreclosure notices issued by lenders.
The value of new loans allocated to the trade and commerce sector grew from Ush207 billion ($54 million) in August 2023 to Ush224 billion ($58.5 million) in September 2023, figures published by the Finance ministry show.
The value of new loans disbursed to the manufacturing sector increased from Ush74.3 billion ($19 million) in August 2023 to Ush80.4 billion ($21 million) in September 2023.
The value of fresh loans disbursed to the real estate and construction sector expanded from Ush166 billion ($43 million) in September 2023 to Ush277 billion ($72 million) in October 2023.
Credit flows targeted at the trade and commerce sector rose from Ush224 billion ($63.8 million) in September 2023 to Ush280 billion ($73 million) in October 2023.
New loans received by the manufacturing sector surged from Ush80.4 billion ($21 million) in September 2023 to Ush258 billion ($67 million) in October 2023, the data revealed.
The weighted average shilling lending rate stood at 18.8 percent between August and October 2023 on account of fairly strong credit default risk signals captured in the banking industry.