Africa-Press – Uganda. The government of Uganda, through the Microfinance Support Centre (MSC), has introduced the Katale Loan, a new financing product aimed at empowering market vendors and small-scale traders with quick, affordable and accessible credit.
Speaking during the launch, Tadeo Atuhura, the Communications Manager at Microfinance Support Centre, said the product is designed to address 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 the Microfinance Support Centre has today introduced the Katale Affordable Loan product, which is a transformative financing solution designed to empower market vendors and small-scale traders with quick, affordable and accessible credit,” Atuhura said.
He explained that the loan is offered at an interest rate of 8% per year, making it one of the most affordable financing options available to traders.
“This particular Katale product is offered at 8 percent interest per year, which is really very important for most of our beneficiaries,” he noted.
The Katale Affordable Loan will initially benefit traders operating in nine major markets across the country, including Owino, Nakasero, Kalerwe, Busega, Gaba and Nakawa markets in Kampala, as well as Iganga Market, Soroti Market and Arua City Market.
According to Atuhura, the main objective of the product is to help traders expand their enterprises, stabilize incomes and break free from exploitative high-interest lending.
“The purpose is to enable traders to expand their enterprises, stabilise their incomes and escape the exploitative high interest rates that exist within their field of trade,” he said.
Under the Katale loan arrangement, beneficiaries access financing through group-based lending, where applicants form groups of ten members who guarantee each other. The product 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 pay back. This promotes collective responsibility, savings discipline and financial inclusion,” Atuhura added.
He emphasized that the Katale loan is more than just financial support.
“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 organised groups, the Microfinance Support Centre is protecting traders from predatory lending while strengthening savings discipline and enterprise sustainability,” he said.
Atuhura further noted that MSC has, over the last 25 years, played a key role in Uganda’s financial inclusion agenda, supporting SACCOs and community groups and directly and indirectly reaching about 7.5 million Ugandans.
He added that the Katale loan fits into the institution’s newly launched 2025–2030 Strategic Plan, which focuses on expanding inclusive financial services, scaling enterprise development and job creation, strengthening institutional sustainability and leveraging technology. The plan is aligned with Uganda Vision 2040 and the National Development Plan IV.
Early beneficiaries have already started accessing the funds, including traders at Nakasero Market.
Faridah Nakabuye, an onion vendor at Nakasero Market and one of the first beneficiaries, welcomed the loan, saying it has eased access to capital for traders.
“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.
She added that unlike banks, 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.
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.
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.
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