Microfinance Support Centre (MSC) on behalf of the Government of Uganda has introduced government financing facility dubbed the Katale Loan, aimed at easing access to affordable credit and stimulating business growth in the informal sector.
The loan targets traders who have long struggled with high-interest loans and strict collateral requirements from commercial banks.
Tadeo Atuhura, MSC Communications Manager told this website that the Katale Loan is designed to directly respond to the realities faced by market vendors.
“The Katale Affordable Loan is a transformative financing solution designed to empower market vendors and small-scale traders with quick, affordable and accessible credit.The loan attracts an interest rate of 8% per year,” Atuhura said,
According to Atuhura, the product will initially cover nine major markets, including Owino, Nakasero, Kalerwe, Busega, Gaba and Nakawa in Kampala, as well as Iganga, Soroti and Arua City markets.
He noted that the facility seeks to help traders grow their businesses and stabilise incomes while shielding them from exploitative lending practices.
“This product is a practical response to the financing challenges faced by our market vendors. By providing affordable credit through organised groups, the government is unlocking enterprise growth, protecting livelihoods and strengthening the informal economy,” he said.
Under the Katale Loan arrangement, traders access funds through group lending, where applicants form groups of ten members who guarantee each other. The loan is collateral-free, requiring no land titles or physical assets, and allows individuals to borrow between Shs 50,000 and Shs 2 million, depending on their repayment capacity.
Atuhura described the Katale Loan as more than just financial support.
“It is a pathway to dignity, stability and growth for market vendors. It protects traders from predatory lending while strengthening savings discipline and enterprise sustainability,” he said.
MSC Katale Loan builds on the institution’s 25-year role in promoting financial inclusion and aligns with its 2025–2030 Strategic Plan, which focuses on expanding access to finance, enterprise development, job creation and last-mile service delivery.
The Katale Loan is expected to provide traders with accessible capital, helping them grow their enterprises, reduce reliance on high-interest lenders and strengthen Uganda’s informal economy.
The Microfinance Support Centre (MSC) has supported over
9,000 financial institutions and reached approximately 7.6 million beneficiaries through credit and enterprise support programs since its inception in 2001.· Approximately 7.6 million direct and indirect beneficiaries have been reached over the last 25 years.
MSC has supported more than 9,000 client institutions, including SACCOs and other microfinance intermediaries.
As of June 30, 2021, the Emyooga initiative alone had mobilized 205,710 parish-based associations under 6,748 SACCOs, benefiting 4,114,200 direct individuals.