CMA licenses Uganda’s first credit rating agency, signals new era for capital markets

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The Capital Markets Authority (CMA) has licensed ICRA Credit Rating Agency, making it the first credit rating agency to operate under Uganda’s regulatory framework.

Speaking at the press conference last Tuesday at the Uganda Business Facilitation Centre, Josephine Okui Ossiya, Chief Executive Officer of the CMA, described the development as a major milestone in the second quarter of 2025.

"During the quarter ending June 2025, the CMA Board approved a Credit Rating Agency license for ICRA Credit Rating Agency," Ossiya confirmed.

"This is a significant development, as the presence of a licensed credit rating agency is expected to stimulate the growth of Uganda’s corporate debt market."

Ossiya explained that credit ratings are key to increasing transparency and efficiency in capital markets by bridging the information gap between debt issuers and potential investors.

"By reducing information asymmetry between issuers of debt securities and investors, credit ratings will boost investor confidence and encourage broader participation in our capital markets," she added.

Sahil Bansal, Group CEO of ICRA Rating, welcomed the CMA’s approval, emphasising its timely nature in light of rising foreign direct investment (FDI) inflows into Uganda.

"This approval has come at the right time. With Foreign Direct Investment (FDI) into Uganda on the rise, the capital market is now poised to thrive as well," Bansal said.

He noted that the entry of ICRA into Uganda will provide the capital markets with a much-needed boost by increasing credibility, reducing perceived investment risks, and opening new financing opportunities for local businesses.

"Credit ratings provided by ICRA will enhance investor confidence, enabling corporates and SMEs to tap into the capital markets. This could also stimulate activity in the corporate bond market, allowing businesses to raise debt outside traditional financing avenues," Bansal explained.

"We believe ICRA can deliver the market insights investors need to make informed decisions, ultimately contributing to the growth and maturity of Uganda’s capital market landscape—both for current and future participants," he added.

Regulatory reforms in motion

The licensing of ICRA comes amid a broader wave of regulatory reforms by CMA aimed at deepening the financial sector and aligning Uganda’s market with international best practices.

In May 2025, the CMA gazetted the Collective Investment Scheme (Licensing) Regulations 2025, a set of reforms aimed at strengthening the oversight and performance of Uganda’s growing Collective Investment Schemes (CIS) sector. As of June 2025, CIS assets had reached an estimated sh4.6 trillion, underlining the sector’s exponential growth.

“This review ensures our framework is abreast with current market innovations and aligned to international best practice,” Ossiya said.

In addition, the CMA has exposed the draft Collective Investment Scheme (Compensation Fund) Rules 2025 for public commentary. The proposed rules seek to enhance investor protection through the creation of a compensation fund that will act as a safety net for investors in case of losses not related to market risk.

"Notably, CIS assets are held by custodians on behalf of investors, which makes investments extremely safe. The Compensation Fund is an additional safeguard for investors," Ossiya noted.

These developments signal a deliberate and strategic push by the CMA to build a more robust, transparent, and investor-friendly capital market.

With the entry of ICRA and the strengthening of the CIS framework, stakeholders expect increased investor participation, enhanced access to long-term financing, and deeper integration of Uganda into regional and global financial markets.

The capital markets in Uganda are now entering a new phase—one marked by stronger governance structures, improved investor confidence, and greater opportunities for businesses to mobilise capital for growth.