Monetary Policy Transmission to Household Credit: Evidence from Uganda's Credit Registry Data

Marina Conesa Martinez, Elizabeth N. Kasekende, Nan Li, Adam Mugume, Musoke Samuel Namwanja, Cedric Okou and Andrea Presbitero

No 20839, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper examines the effectiveness of monetary policy transmission in developing countries using loan-level data from Uganda's credit registry. We analyze more than 632,000 household loans issued by all commercial banks between 2017 and 2023, a period marked by significant policy rate fluctuations. We find that household credit, which accounts for over 50 percent of new loan accounts, responds to monetary policy: rate hikes are followed by higher lending rates and reduced loan size and maturity. Controlling for credit demand with time-varying borrower-group fixed effects, we find stronger transmission among banks with lower liquidity and capital, and those holding more government securities. The effects are more pronounced for fixed-rate loans than for floating-rate loans. In general, our results support the presence of a bank lending channel in Uganda, similar to what is observed in more advanced economies.

Keywords: Monetary policy transmission; Household credit; Bank lending channel; Development finance (search for similar items in EconPapers)
JEL-codes: E52 E58 G21 G51 O16 (search for similar items in EconPapers)
Date: 2025-11
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