BoU authorises Finance Trust downgrade from commercial bank to credit institution

Finance Trust Bank is set to transition from a Tier I commercial bank to a Tier II credit institution, with the change taking effect on 1 April 2026.

The transition, which was approved the the bank’s board of directors has been greenlighted the Bank of Uganda 

The Central Bank has granted a three-month transition period that began on 1 January, during which FTB will phase out products reserved for commercial banks in an orderly manner to protect customers and financial-sector stability.

The Bank of Uganda said the board of Finance Trust Bank opted for the change to better align with its core business and customer base. 

In a statement, the central bank said the institution met the minimum capital requirements for a credit institution licence and remains adequately capitalised.

Finance Trust Bank’s roots go back to 1984, when it was founded in Uganda as Uganda Women’s Finance and Credit Trust Limited, a non-government organisation aimed at providing financial services to low-income people, especially women. 

Over time, the organisation evolved and changed its name to Uganda Women’s Finance Trust Limited in 1997 before becoming a licensed microfinance deposit-taking institution (MDI) in 2005.

After years of growth and expansion, the Bank of Uganda granted the institution a full commercial banking licence on 11 November 2013, and it began operating as Finance Trust Bank. 

As a commercial bank, FTB focused on offering a broad range of services — from loans and savings accounts to money-transfer and insurance products — and built a network of over 30 branches across the country, including in rural areas. Women traditionally make up a large share of its customer base.

Uganda’s financial sector is structured into several tiers under the supervision of the Bank of Uganda:

Tier I – Commercial banks are licensed to offer the broadest range of services, including checking and savings accounts, foreign exchange, loans and trade finance, and interbank clearing.

Tier II – Credit institutions can accept certain deposits and provide lending services, but they typically do not offer chequing accounts or foreign exchange trading.

Tier III – Microfinance deposit-taking institutions focus on microloans and deposits, and Tier IV institutions include non-deposit taking microfinance and savings cooperatives.

In recent years, tougher capital requirements for Tier I commercial banks have forced several lenders, including ABC Capital, Guaranty Trust Bank and Opportunity Bank, to relinquish their commercial bank licences and opt for Tier II credit institution status. Finance Trust Bank’s change is part of this broader trend.