Uganda Launches Katale Loan

The government of Uganda, through the Microfinance Support Centre (MSC), has introduced the Katale Loan, a new financing product designed to empower market vendors and small-scale traders with quick, affordable, and accessible credit.

A Game-Changer for Market Vendors

Tadeo Atuhura, the Communications Manager at MSC, expressed excitement about the launch, stating that the product is aimed at addressing long-standing financing challenges faced by traders in urban markets. “We are very excited that as an institution we are introducing a new product. The government of Uganda, through MSC, has today introduced the Katale Affordable Loan, which is a transformative financing solution designed to empower market vendors and small-scale traders with quick, affordable and accessible credit,” Atuhura said.

Affordable and Accessible Financing

The Katale Loan offers an interest rate of just 8% per year, making it one of the most affordable financing options available to traders. Atuhura emphasized that this low interest rate is crucial for many beneficiaries who often face exploitative high-interest lending.

“This particular Katale product is offered at 8 percent interest per year, which is really very important for most of our beneficiaries,” he noted.

Targeted Markets for Initial Launch

Initially, the Katale Loan will benefit traders operating in nine major markets across the country, including Owino, Nakasero, Kalerwe, Busega, Gaba, and Nakawa markets in Kampala, as well as markets in Iganga, Soroti, and Arua City.

The main goal of the loan is to help traders expand their enterprises, stabilize incomes, and break free from the high-interest borrowing traps that many traders face.

“The purpose is to enable traders to expand their enterprises, stabilize their incomes, and escape the exploitative high-interest rates that exist within their field of trade,” Atuhura said.

Group-Based Lending for Collective Responsibility

Under the Katale loan arrangement, traders will access financing through group-based lending. Applicants will form groups of ten members who guarantee each other. The loan is collateral-free, requiring no land titles or assets as security.

“Each individual may borrow from shs50,000 up to shs2 million, depending on their capacity to repay. This promotes collective responsibility, savings discipline, and financial inclusion,” Atuhura added.

More Than Just a Loan: A Pathway to Growth

Atuhura emphasized that the Katale Loan is more than just financial support; it is a pathway to dignity, stability, and growth for market vendors. “This product is more than a loan product. It is a pathway to dignity, stability, and growth for market vendors. By offering affordable credit at 8 percent per year and anchoring access through organized groups, MSC is protecting traders from predatory lending while strengthening savings discipline and enterprise sustainability,” he said.

MSC’s Role in Financial Inclusion

The Microfinance Support Centre has been a key player in Uganda’s financial inclusion agenda for over 25 years. MSC has supported SACCOs and community groups, reaching approximately 7.5 million Ugandans, both directly and indirectly.

The Katale Loan aligns with MSC’s 2025–2030 Strategic Plan, which focuses on expanding inclusive financial services, scaling enterprise development, job creation, strengthening institutional sustainability, and leveraging technology. The plan is also aligned with Uganda Vision 2040 and the National Development Plan IV.

Early Beneficiaries See Immediate Impact

Early beneficiaries of the Katale Loan have already started accessing funds, including traders at Nakasero Market. Faridah Nakabuye, an onion vendor at Nakasero Market and one of the first beneficiaries, expressed gratitude for the loan’s accessibility.

“I’m impressed with this affordable loan meant for us people working in Katale. I’ve received a shs 1,000,000 loan without necessarily moving around as it has been with banks. This money has come directly to my account,” Nakabuye said.

Unlike banks, Nakabuye added, the Katale loan does not require collateral. “Banks have been disturbing us with collateral, but for this Katale loan, they need a national ID and your SACCO group. It’s going to boost my business, and I will ensure I pay it on time since it has a low interest rate and go for another one. I thank the government for thinking about us, the lay people,” she said.

Market Leaders Praise the Initiative

Leaders at the market have also welcomed the initiative. Ritah Nandutu, the Chairperson of the Onion Department at Nakasero Market, said the loan will unlock growth for traders who previously lacked capital.

“I’m happy as a leader of the onion department at Nakasero that my members have received money. This Katale loan is going to help our businesses to grow because we have the market but lacked capital. Thank you Microfinance Support Centre and government for this package,” Nandutu said.

A Significant Boost for Uganda’s Informal Economy

With its low-interest rate, collateral-free structure, and group-based lending model, the Katale Loan is expected to significantly boost business growth, protect livelihoods, and strengthen Uganda’s informal economy.

Uganda Launches Katale Loan to Empower Market Vendors and Small-Scale Traders