Banking - Uganda

Uganda

In 2024, it is projected that the Banking market in Uganda will witness a significant increase in Net Interest Income, reaching US$571.50m.
Traditional Banks are expected to dominate this market segment, with a projected market volume of US$559.30m in the same year.
Looking ahead, the Net Interest Income is anticipated to exhibit a compound annual growth rate (CAGR 2024-2029) of -1.24%, resulting in a market volume of US$536.90m by 2029.
When compared globally, it is noteworthy that China will generate the highest Net Interest Income, amounting to US$4,332.0bn in 2024.
The banking sector in Uganda is experiencing a surge in digital banking services, with mobile banking becoming the preferred method for many customers.

Key regions: United States, China, Japan, Brazil, United Kingdom

Definition:

The Banking market refers to the financial services sector providing financial products and services to individuals and businesses. Retail banking focuses on offering financial services to individual consumers, such as personal loans, savings and checking accounts, credit cards, and mortgages. Commercial banking, on the other hand, provides financial services to small and large businesses, including loans, lines of credit, and other financial products designed specifically for businesses.

Structure:

The market consists of two segments:
- The Traditional Banking market refers to the financial services sector that provides a range of financial products and services to individuals and businesses through store-based branches and other traditional channels.
- The Digital Banking market refers to the emerging market for digital-only banks that offer financial services through online and mobile platforms.

The market data comprises Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the Retail & Commercial banking market, creating opportunities for new entrants, and forcing existing players to adapt.
Key players in this market are companies such as the Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

The Banking market in Uganda has been experiencing significant growth and development in recent years.

Customer preferences: Customers in Uganda are increasingly turning to digital banking solutions due to the convenience and accessibility they offer. Mobile banking and online banking services have seen a surge in popularity as customers seek faster and more efficient ways to manage their finances.

Trends in the market: One notable trend in the Ugandan banking market is the increasing competition among banks to expand their branch networks in both urban and rural areas. This trend is driven by the growing demand for banking services across the country, especially in underserved regions. Additionally, there is a noticeable shift towards sustainable and socially responsible banking practices, with more banks in Uganda incorporating environmental and social considerations into their business strategies.

Local special circumstances: Uganda's banking market is also influenced by unique local factors such as the high level of mobile penetration in the country. This has paved the way for innovative mobile banking solutions tailored to the needs of the Ugandan population. Moreover, the government's efforts to promote financial inclusion and stability in the banking sector have created a conducive environment for growth and development.

Underlying macroeconomic factors: The growth of the banking market in Uganda is further supported by favorable macroeconomic conditions, including stable economic growth, low inflation rates, and ongoing regulatory reforms aimed at strengthening the financial sector. These factors contribute to a positive investment climate and attract both domestic and foreign players to the Ugandan banking market.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.