Finance Minister Urges Banks to Lower Loan Costs for $500 Billion Economy Target

Finance Minister Henry Musasizi has issued a challenge to Uganda’s financial institutions, urging them to significantly lower the cost of credit. This directive is a key component of the national strategy to propel the economy towards the ambitious target of $500 billion by the year 2040.

Speaking at the second Annual Research Conference hosted by the Uganda Institute of Banking and Financial Services (UIBFS), Musasizi emphasized the need for the financial sector to innovate beyond traditional lending models. He stressed the importance of developing financial products that can effectively support businesses and other productive sectors, while simultaneously broadening financial inclusion across all segments of society.

“My new assignment comes at the time when Uganda must grow its economy to USD 500 billion by 2040,” Musasizi stated, highlighting the parallel need to increase domestic resource mobilization for government obligations and prudently manage anticipated oil revenues without destabilizing the economy.

The Minister underscored that achieving inclusive economic growth requires the active participation of all citizens, irrespective of their income levels. He reiterated that the transformation agenda must ensure that everyone is part of the nation’s progress.

Musasizi also pointed to budget discipline as a critical factor in realizing the Vision 2040 objectives, particularly as the government seeks to enhance its capacity to fund national programs through internal resources. He specifically tasked the UIBFS to prioritize research in areas such as expanding long-term, patient capital, deepening financial inclusion, and reducing the overall cost of credit.

The government, he assured, is prepared to leverage evidence-based research to inform its policy decisions and strategic planning. Furthermore, Musasizi called upon financial institutions to redirect their focus towards financing the real economy by crafting suitable financial products and making credit more accessible and affordable for productive enterprises.

Areas identified for future research within the financial sector include digital finance and FinTech, capital markets development, domestic revenue mobilization strategies, and climate finance aligned with green growth initiatives. The Minister commended the sector for aligning its strategic direction with the government’s aspiration for substantial economic expansion.

This address coincided with the UIBFS’s launch of a Research Hub, featuring their 2026–2030 Research Agenda, a dedicated Research Centre, and the opening of applications for their Research Fund. The conference itself serves as a platform to integrate financial sector research into the broader national dialogue on capital mobilization, financial access, and strengthening domestic financing for Uganda’s long-term economic aspirations.

Source: Nile Post