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

Author

Listed:
  • Mrs. Marina Conesa Martinez
  • Elizabeth Kasekende
  • Ms. Nan Li
  • Adam Mugume
  • Samuel Musoke
  • Cedric I Okou
  • Mr. Andrea F Presbitero

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.

Suggested Citation

  • Mrs. Marina Conesa Martinez & Elizabeth Kasekende & Ms. Nan Li & Adam Mugume & Samuel Musoke & Cedric I Okou & Mr. Andrea F Presbitero, 2025. "Monetary Policy Transmission to Household Credit: Evidence from Uganda’s Credit Registry Data," IMF Working Papers 2025/242, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2025/242
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