A critical analysis of the legal and regulatory framework governing bank lending in Uganda

Abstract

This study analyzed the legal and regulatory framework governing bank lending in Uganda. It sought to find out whether the existing legal and regulatory framework has any influence on the cost and performance of bank loans and banks in Uganda. The study conceptualized bank lending to also include factors such as lending rates and non-performing loans. The study used qualitative research design and a comparative analysis was made with Kenya’s legal and regulatory framework for bank lending in order to draw inferences about causation and association of regulatory factors between the two countries. The findings from the study indicated inherent gaps within Uganda’s legal and regulatory framework. Among the gaps that were identified is the inadequacy of monitoring,supervisory and compliance enforcement mechanisms. The study recommends a review of the law to enhance the effectiveness of these mechanisms and the efficiency and effectiveness of bank lending in Uganda.