Debt in Uganda

Formal debt providers in Uganda include banks, credit institutions, microfinance deposit-taking institutions and other providers supervised by the Bank of Uganda (BoU). Tier 4 institutions, including many non-deposit-taking microfinance institutions, SACCOs and money lenders, fall within the Ministry of Finance, Planning and Economic Development and Uganda Microfinance Regulatory Authority (UMRA) framework. Current supervisory responsibility should be confirmed where the transition between authorities affects the provider. Informal debt commonly comes from savings groups, self-help groups, family members or traders. These arrangements may be useful but do not have one national consumer-protection or enforcement standard comparable to a licensed lender. A borrower should verify the provider before signing. A money lender should have company registration with the Uganda Registration Services Bureau (URSB) and a UMRA licence. UMRA provides licensing, complaint and guidance channels, while BoU publishes information about supervised banks and other regulated providers. Digital lenders should also be checked carefully because unlicensed applications can combine high charges with weak privacy protection and aggressive collection practices. Licensed digital lenders are expected to avoid misleading representations, harassment and unethical collection. A written loan agreement should state the principal, interest, fees, repayment dates, collateral and consequences of default. For a money lender, Legal Notice No. 21 of 2024 sets a maximum rate of 2.8% per month or 33.6% per year on the principal or actual advance. That limit applies to money lenders and does not automatically apply to banks, microfinance deposit-taking institutions or SACCOs. UMRA material contains older conflicting rate information, so the current Gazette and the responsible authority should be checked when the rate is disputed. Other charges, including disclosed fees, collateral costs, court costs, sale costs and insolvency fees, depend on the agreement and the case. A money lender may not take a National ID, passport, ATM card, PIN or bank savings as collateral. A sales agreement or transfer document cannot replace the required loan agreement. The borrower should receive a copy, obtain a receipt for every payment and retain records; the lender must keep relevant records for at least 10 years. The borrower can request written information about outstanding principal, interest, payments and payment dates. A credit reference bureau (CRB) records debt and repayment history, and a borrower can request their own information under the applicable CRB access rules and dispute inaccurate entries through the available correction process. Security interests in movable property, such as vehicles, machinery, farm produce, inventory, receivables or intellectual property, can be recorded and searched through the Security Interest in Movable Property Registry (SIMPO) operated through URSB. A lender should search existing claims before accepting an asset as security. A money lender generally needs to make a written demand and wait at least 60 days before enforcing collateral. The borrower can redeem the asset until disposal, and the lender must take reasonable care; loss or damage can create a claim based on the asset's value, subject to the outstanding principal and interest. A court can reopen an agreement involving excessive interest or charges, harsh or unconscionable terms, change the security or order repayment. If repayment fails, a creditor can use court recovery, mediation or another appropriate form of alternative dispute resolution. A lender seeking court recovery must produce relevant records, and a court may terminate the contract after default and award the principal plus legally permitted interest. Uganda's Small Claims Procedure (SCP) covers debt claims up to UGX 10,000,000, subject to its claimant and defendant rules, designated courts, a prior 14-day demand notice, a claim form and proof of service. The Judiciary's current court designation should be checked because the list has changed over time, and default judgment may follow when the defendant does not respond. The Insolvency Act 2011 provides formal proceedings including individual bankruptcy, an arrangement order, corporate liquidation and receivership. The Registrar General at URSB acts as Official Receiver for relevant cases. Bankruptcy does not automatically remove every obligation: secured creditors generally retain their security, and debts connected with fraud, fines or court-prescribed exceptions can remain. Discharge requires a court order and depends on the person's conduct, report, future earnings and property circumstances. Uganda has no evidenced national one-stop consumer debt-relief service equivalent; practical alternatives include negotiating restructuring with the creditor, using UMRA or BoU complaint channels, mediation, court proceedings or a formal insolvency application. Household debt and public debt are separate matters. A December 2025 Ministry of Finance, Planning and Economic Development debt sustainability report put Uganda's total public debt at about USD 34.86 billion, with approximately 54.5% domestic debt and 45.3% external debt, equal to a nominal debt-to-GDP ratio of 52.7%. These figures describe government finances and do not create an individual household debt-relief option. Historical 2019/20 survey data found that 19% of adults had used a loan or credit in the previous 12 months, with informal sources accounting for 56.6% of reported borrowing sources; that historical result should not be treated as a current prevalence estimate.