The role of commercial banks as agents in the uptake of commercial bills and bonds in Uganda. A case study of Primary Dealer banks
MetadataShow full item record
This study aims to find out the role of commercial banks as agents in the uptake of Treasury bills and bonds in Uganda by using a case study of the eight Primary dealer banks. Treasury bills and bonds are very vital in the development of the capital and financial markets in Uganda, especially for a growing economy. The available literature shows a low level of general uptake of Treasury bills and bonds in the country. In 2020, the Primary dealer system was introduced with eight commercial banks identified as Primary dealers to act on behalf of the Central bank in the trade of Treasury bills and bonds. It is on this basis that the study aims to find out the effectiveness of these banks in uptake of T-bills and T-bonds. The study uses secondary data from the annual Financial documents of the commercial banks to carry out a regression analysis with uptake of Treasury bills and bonds in Uganda as the dependent variable and the amount of Treasury bills and bonds issued by the Central bank as the independent variable. From this, the study found a positive correlation between the two variables which signifies that commercial banks have played an important role in the uptake of these financial instruments. However, with the correlation being low, the study showed that there were other factors that affect the uptake of T-bills and T-bonds in Uganda, for which recommendations were made to improve the overall uptake. These included extensive education and sensitization, offering subsidies and redesigning some of the Treasury instruments to make them more attractive.