UBOS: More than 20% of Ugandan Households Borrowed Money during Covid-19

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Every fifth household in Uganda had to borrow money to face the COVID-19 emergency since March 2020, a new report has revealed.

Findings showed that slightly more than 20 percent of households had to borrow irrespective of whether they were living in urban or rural areas, underscoring the far reaching impact of the Covid-19 pandemic which has so far killed over 100 people in Uganda.

Interestingly, Households from the poorest quintile were least likely to borrow money.

At the regional level, the survey showed that households from the Eastern (36%) and Central (27%) regions were more likely to borrow money. The households in Western region were least likely to borrow money (8%).

These are some of the findings from the second round of the Uganda High-Frequency Phone Survey on COVID-19 (UHFPS) conducted in July/August 2020.

In June 2020, the Uganda Bureau of Statistics (UBOS), with the support from the World Bank, officially launched the HFPS to track the impacts of the pandemic on a monthly basis for a period of 12 months.

The survey aimed to recontact the entire sample of households that had been interviewed during the Uganda National Panel Survey (UNPS) 2019/20 round and that had phone numbers for at least one household member or a reference individual.

The first round (baseline) of the survey was conducted from June 3rd to June 20th and the second round was conducted between July 31 and August 21, 2020.

Of the 2,421 households targeted, 2,227 households were interviewed in round 1, and of those, 2,199 were interviewed in round 2, representing a 99 percent response rate between rounds.


According to the survey, the main reasons for borrowing ranged from employment shocks to loss of assistance from family or neighbors.

“Those who had to borrow to face COVID-19 emergency situations were asked why they had to do so,” the report seen by ChimpReports reads in part.

“The largest share of households had to borrow (27%) because they could not get assistance from family or neighbors.”

Several reasons were related to the situation in the labor market and overall economy.

About 18 percent of respondents mentioned closure of business, 24 percent inability to sell produce and 25 percent mentioned a reduction in sales.

Covid-19 containment measures such as restrictions on travel, public gatherings, closure of businesses and schools had a severe impact on the economy and people’s livelihoods.

The World Bank said an estimated 3.15 million could fall deeper into poverty, adding to the 8.7 million people Ugandans currently living below the poverty line.

The UBOS survey showed that a “reduction in sales was a particularly important reason in the Central region, among the richest top quintile and urban residents.”

Yet, the inability to sell produce was a prominent reason in the Northern region, among rural residents and the poorest households.

Business closure was most important in the Western region, among urban residents and the richest households. In the Eastern region the major reason was due to failure to obtain money from family or neighbors.

Borrowing from friends, relatives and neighbors was the main source of credit after March 2020, in particular among rural residents and among the poorest households.

Access to credit from formal financial institutions such as commercial banks and credit institutions remained quite low.

Only 12 percent of households used this source and access was much higher among urban residents and those from the richest quintile.

In contrast, rural households and the poorest were more likely to borrow from saving groups/loan associations and from friends and neighbors.


Meanwhile, the same report indicated that two third of households were worried about the repayment of borrowed money within the repayment period, with higher levels of concern among the poorest and rural residents.

Respondents were asked if they worried about being unable to pay money within the repayment period.

Almost 70 percent of respondents were very worried or worried about repaying money on time. This share was slightly higher among rural households (70%) compared to urban ones (62%); and among the poorest households from the bottom 20 percent of the population (79%) compared to the richest households from the top quintile (62%).

Safety net support has changed across rounds from prevalent food aid in the first round to in-kind non-food transfers in the second.

Many urban households reported getting food aid during the first round following the food distributed after March 20 mainly targeting Kampala. About 9 percent of households reported getting food aid.

During the second round conducted in July-August, when questions were asked about getting social assistance since the last interview in June, the share of households getting food aid dropped to about 2 percent.

However, many households reported getting in-kind non-food assistance in the form of masks, mosquito nets and soap (16%). The highest share of households getting in-kind non-food aid were observed in rural areas (18%), among the poorest quintile (20%), and in the Northern region (26%).

Source – ChimpReports

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