New Opportunities
The moratorium on new banks was lifted in July 2007. During the eighteen (18) months that followed the lifting of the moratorium, eight new commercial banks were licensed. These included Kenya Commercial Bank, Equity Bank and Fina Bank, all from Kenya. Global Trust Bank and United Bank for Africa trace their roots from Nigeria. Ecobank is headquartered in Togo and Housing Finance Bank is an indigenous operation. Three other banks, ABC Bank (Kenya), Access Bank from Nigeria and CRDB Bank from Tanzania, have publicly declared their intention to start banking operations in Uganda.
During 2008 and 2009, several of the existing banks went on an accelerated branch expansion either through mergers and acquisitions or through new branch openings. As of October 2010, there were 22 licensed commercial banks in Uganda, with nearly 400 bank branches and a total of almost 600 automated teller machines.
As of December 2009, total commercial bank assets in Uganda were estimated at US$4.6 billion (UGX 8.73 trillion). (Official Exchange Rate in December 2009 was US$1=UGX:1,897) The number of bank accounts in the country was over five million. This represented a 16% penetration, given Uganda's population of 32,000,000, at that time.
By April 2011, the number of commercial banks had increased to 23. The bank branches in the country numbered over 400. The banking sector employed over 8,700 people. Total commercial bank assets in the country were valued at US$4.78 billion (UGX:11 trillion). (Official Exchange Rate in December 2010 was US$1=UGX:2,300).
Rwanda joined the East African Development Bank in July 2008. Burundi is expected to join the bank in the near future.In April 2009, Bank PHB, Nigeria's fifth largest bank, bought 80% ownership of Orient Bank, Uganda's 8th largest commercial bank. This brings the current number of Ugandan banks with major investments from Nigeria to three (3).
In November 2010, Bank of Uganda, the national banking regulator, directed that all commercial banks in Uganda, must raise their minimum capital to Ugx:10 billion (approximately US$4.34 million) by March 2011 and to Ugx:25 billion (approximately US$11 million) by March 2013. Any new commercial bank entering the Ugandan market effective November 2010, has to have a minimum capitalization of Ugx:25 billion. However most of the banking activity is concentrated around Kampala, the country's capital and other large towns, leaving 42% of Ugandans at the mercy of the informal financial sector, and another 30%, totally excluded from the financial services sector, according to a study in 2010.
In November 2012, the total number of commercial bank branches in the country reached 500.
Read more about this topic: Banking In Uganda