Uganda Loan applications have dropped to 17,558 at the end of November from 18,486 in October, the Uganda Central Bank indicated in a new report.
The report pointed out that total loan amounts approved also fell to UGX423 Billion in November from UGX510Billion in October.
In an effort to maintain price stability and control inflation, the Uganda Central Bank embarked on aggressive tightening cycle in August, raising the Central Bank Rate, its benchmark rate four times in a row after launching it at 13 percent in July.
However, despite the tightening of the monetary policy to discourage unnecessary borrowing, credit to private sector continued to grow throughout 2011, the report said.
It showed that the shilling denominated loans grew by 28.4 percent to 178.7billion in August from a dip of minus UGX19.8Billion in July 2011.
"In terms of sectoral distribution, trade and commerce accounted for about 22 percent of the total private sector credit." The report noted that this was followed by building, mortgage, construction and real estate at 20 percent.