Small loans for Ugandan traders and households
In Uganda, microcredit is provided by deposit-taking microfinance institutions supervised by the Bank of Uganda, by banks such as Centenary, and by SACCOs, VSLAs and non-deposit-taking microfinance institutions that fall under UMRA.
MDIs and Tier 4: Ugandan microfinance by level
MDIs such as FINCA Uganda take savings from the public under Bank of Uganda supervision. Non-deposit-taking microfinance institutions, SACCOs and VSLAs belong to Tier 4 and fall under UMRA, with lighter prudential requirements.
Centenary, Opportunity and Finance Trust
Centenary Bank, Opportunity Bank and Finance Trust Bank built their customer base on small traders and rural households. They offer individual or group loans, often combined with a compulsory savings account that the borrower must keep funded.
Joint liability, from Gulu to Mbale
Group members guarantee one another and repay every week or every month at meetings. This model, widespread in Kampala as well as Gulu and Mbale, replaces the physical collateral that few micro-entrepreneurs own.
Emyooga and trade-based SACCOs
Launched in 2019, Emyooga funds SACCOs that bring together specific trades: boda boda riders, hairdressers, tailors, carpenters, market vendors and welders. The Microfinance Support Centre transfers the public funds, which these SACCOs then lend to their members.
The Parish Development Model and its parish SACCOs
Launched in February 2022, the PDM pays funds every year to a SACCO in each parish of the country. Eligible households borrow for farming or trading activities chosen by the community, on softer terms than the market offers.
Rates charged by Ugandan MDIs and SACCOs
MDI and SACCO rates remain higher than those on salary loans, because of monitoring costs and the small size of the loans. Money lenders, for their part, have been capped at 2.8% a month since November 2024.
Prior savings and life cover
Before a first loan, many institutions require a savings period or a blocked deposit equal to part of the amount. Life insurance is generally included, and its premium is withheld when the loan is disbursed to the client.
Repaying through MTN MoMo and Airtel Money
Instalments are increasingly paid by mobile money, which saves a trip to the branch. Some MDIs also grant small, fully digital loans to their regular clients once they have repaid a few loan cycles.
From group loans to SME credit
As a business grows, the client can move from a group loan to an individual loan, then to SME credit. Our page on financing Ugandan entrepreneurs presents the Uganda Development Bank and the public funds aimed at businesses.
Coffee, maize and seasonal repayments
In regions that grow coffee, maize or bananas, repayments are sometimes adjusted to the harvest calendar. Our guide to agricultural loans in Uganda details the central bank's Agricultural Credit Facility and the role of rural SACCOs.
Checking licences on the official lists
The Bank of Uganda publishes the list of MDIs, and UMRA the list of Tier 4 institutions and licensed lenders. A licence on display in a branch is not enough: check the official list before handing over savings or fees.
Ugandan microfinance compared with Burundi
Ugandan microfinance is among the oldest in the region. Microcredit in Burundi also relies on savings cooperatives and microfinance institutions, but it operates in a smaller market and under a different system of supervision.
Getting a first microloan in Uganda
- Choose a licensed MDI, microfinance bank or SACCO close to your market or village.
- Open a savings account and save regularly throughout the required observation period.
- Join a solidarity group or provide a guarantor, depending on the institution's lending method.
- Present your activity to the loan officer, who visits the business or farm and assesses its cash flow.
- Sign the contract, receive the funds and repay at each meeting or by mobile money.
Costs of a microloan in Uganda
| Item | Level | Factors |
|---|---|---|
| Interest at MDIs and banks | Set by each institution | Amount, term and lending method |
| Money lender ceiling | 2.8% a month (indicative) | Does not apply to MDIs or SACCOs |
| Application fee | Percentage of the loan | Institution's policy |
| Compulsory savings | Blocked share of the amount | First loan or regular client |
| Life insurance | Premium withheld at disbursement | Amount and term |
Documents for a Ugandan microloan
- Ndaga Muntu national ID card
- Recommendation letter from the LC1 chairperson
- Passport photo
- Trading licence from the district or municipality, if available
- Savings book or statement
- Undertaking from group members or the guarantor
Frequent mistakes in Ugandan microfinance
- Borrowing from several institutions at once to repay one loan with another, until you are over-indebted.
- Depositing savings with an unlicensed outfit that can vanish with the members' money.
- Using an Emyooga or PDM loan for consumer spending instead of the planned activity.
- Paying fees to a fake agent who promises priority access to the public funds of parish SACCOs.
- Skipping group meetings, which loses the trust of the other members who act as your guarantors.
Lenders to contact
- FINCA Uganda: Ugandan microfinance institution of the FINCA network, active in lending to individuals and small businesses across the country.
- Centenary Bank: Ugandan commercial bank offering housing loans, including the CenteLand loan designed to finance the purchase of land.
Questions about microcredit in Uganda
What is the difference between an MDI and a SACCO in Uganda?
An MDI is a microfinance company authorised to take deposits from the public and supervised by the Bank of Uganda. A SACCO is a cooperative that only collects savings from its members and falls under UMRA as well as the cooperatives register.
Do Emyooga funds have to be repaid?
Yes. Funds transferred to Emyooga SACCOs by the Microfinance Support Centre are lent to members, who must repay them to keep a revolving fund going. Terms are set by each SACCO in line with the programme guidelines.
Who can borrow under the Parish Development Model?
Households in the parish, with priority for those engaged in subsistence farming, who are members of the local PDM SACCO and involved in enterprises selected by the community. Applications go through the parish structures.
Can a microloan be obtained entirely online in Uganda?
Some MDIs and banks grant digital loans to clients they already know, through an app or a USSD code. For a first loan, a visit from the loan officer and a savings account remain the norm.