Legal and Non-legal Drivers of Corporate Failure in Uganda’s Commercial Banking Industry
Author (s)
Huraira Muzahura, Gwokyalya Waliya, Allan Mufumbiro, & Richard Wemesa
Abstract
This paper examines the statutory and extra-legal drivers of corporate failure in Uganda’s commercial banking industry using a doctrinal legal methodology. Analysing statutes, judicial decisions, and peer-reviewed scholarship (1976–2026) alongside World Bank and IMF reports, the study finds that bank collapses stem from weak regulatory enforcement, high lending rates, restricted credit, borrower financial illiteracy, and excessive concentration of loans and deposits. Integrating agency, stakeholder, and institutional theories, the study formulates testable propositions on governance failures, enforcement gaps, and ownership concentration. A comparative case analysis of Crane Bank, Global Trust Bank, and Mercantile Credit Bank reveals recurrent patterns of insider misconduct, delayed intervention, and inadequate resolution mechanisms. A cross‑country comparison of central bank enforcement powers (Uganda, Kenya, Rwanda) identifies legislative gaps, including the absence of administrative fining powers and a disqualified directors register. The study recommends strengthened regulation, enhanced risk management, expanded financial literacy, lending diversification, and greater competition. Limitations of the doctrinal method are acknowledged. Future research should empirically test the proposed propositions and extend comparative studies across East African Community member states. This research provides strategic guidance for policymakers and financial institutions seeking to build a more resilient banking system in a developing‑country context.
Key words: Banking sector, corporate collapse, regulatory framework, financial stability, Uganda, agency theory, stakeholder theory, institutional theory.
| Title: | Legal and Non-legal Drivers of Corporate Failure in Uganda’s Commercial Banking Industry |
|---|---|
| Author: | Huraira Muzahura, Gwokyalya Waliya, Allan Mufumbiro, & Richard Wemesa |
| Journal Name: | Journal of Scientific Reports |
| Website: | http://ijsab.com/jsr |
| ISSN: | ISSN: 2708-7085 (Online), ISSN: 3079-9317 (Print) |
| Publisher | IJSAB International |
| DOI: | https://doi.org/10.58970/JSR.1210 |
| Media: | Online |
| Volume: | 14 |
| Issue: | 1 |
| Acceptance Date: | 28/05/2026 |
| Date of Publication: | 30/05/2026 |
| PDF URL: | http://ijsab.com/wp-content/uploads/1210.pdf |
| Free download: | Available |
| Page: | 154-173 |
| First Page: | 154 |
| Last Page: | 173 |
| Paper Type: | Doctrinal Legal Study |
| Current Status: | Published |
Cite This Article:
Muzahura, H., Waliya, G., Mufumbiro, A., & Wemesa, R. (2026). Legal and Non-legal Drivers of Corporate Failure in Uganda’s Commercial Banking Industry, Journal of Scientific Reports, 14(1), 154-173. DOI: https://doi.org/10.58970/JSR.1210
About Author (s)
Huraira Muzahura, School of Law and Management Science, King Ceasor University, Kampala Uganda.
Gwokyalya Waliya, School of Law and Management Science, King Ceasor University, Kampala Uganda.
Allan Mufumbiro, School of Law and Management Science, King Ceasor University, Kampala Uganda. ORCID: https://orcid.org/0009-0009-5822-537X
Richard Wemesa (Corresponding Author), Department of Management Sciences, King Ceasor University, Uganda; Department of Applied Business Administration, Cornerstone University Uganda; Department of Economics, Powislanska Academy of Applied Sciences, Kwidzyn, Gdansk, Koscierzyna, Torun, Poland; Department of Business Administration, Unicaf University, Uganda. ORCID: https://orcid.org/0009-0004-3425-4268
DOI: https://doi.org/10.58970/JSR.1210
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