KAMPALA, January 4, 2026 — 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 at the launch, Tadeo Atuhura, Communications Manager at the Microfinance Support Centre, said the product was 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… introduced the Katale Affordable Loan product, 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 attracts an interest rate of 8 per cent 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 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, stabilise 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 one another. The product is collateral-free and does not require land titles or assets as security.
“Each individual may borrow between Shs50,000 and Shs2 million, depending on their repayment capacity. This promotes collective responsibility, savings discipline and financial inclusion,” Atuhura added.
He emphasised that the Katale loan goes beyond financial support.
“This product is more than just a loan. It is a pathway to dignity, stability and growth for market vendors. By offering affordable credit at 8 per cent 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 over the last 25 years, MSC has played a key role in Uganda’s financial inclusion agenda, supporting Savings and Credit Cooperative Organisation [SACCOs] and community groups and directly and indirectly reaching about 7.5 million Ugandans.
He added that the Katale loan aligns with 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 had eased access to capital for traders.
“I’m impressed with this affordable loan meant for people working in Katale. I have received a Shs1 million loan without moving around as we do with banks. The money has come directly to my account,” Nakabuye said.
She added that, unlike banks, the Katale loan does not require collateral.
“Banks keep asking us for collateral, but for this Katale loan, all they need is a national ID and your SACCO group. It will boost my business, and I will make sure I pay it on time because of the low interest rate and apply for another one. I thank the government for thinking about ordinary people like us,” she said.
Market leaders have also welcomed the initiative. Ritah Nandutu, Chairperson of the Onion Department at Nakasero Market, said the loan would unlock growth for traders who previously lacked capital.
“I am happy, as a leader of the onion department at Nakasero, that my members have received money. This Katale loan will help our businesses grow because we have the market but lacked capital. I thank the Microfinance Support Centre and the 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.
https://thecooperator.news/msc-collaborates-to-enhance-livelihoods-in-tesos-ateker-community/
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