Determinants of lending interest rates in commercial banks in Uganda (1998-2014)

Abstract

The study examined the determinants of lending interest rates in Uganda focusing on Barclays bank between 1998 and 2014. The lending interest rates, the 91 - day treasury bills, the deposit rate, the bank rate, the inflation rate and the exchange rate are the variables under study. The researcher used the multiple regressions to analyze the data. The results confirmed that the 91- day treasury bill and bank rate have a significant effect on the lending interest rates though the 91 - day treasury bill has a negative effect. The other variables do not have a significant effect on the lending interest rate. The recommendations were therefore that government should adopt policies that will help commercial banks in Uganda to improve their performance through the lending interest rates and there is need to strengthen bank lending interest rate policy through effective and effective regulation and supervisory framework