President Yoweri Museveni has ordered the Microfinance Support Centre (MSC) to provide special low-interest loans to market vendors across Kampala, starting with traders in Kalerwe and St. Balikuddembe (Owino) markets. The new “Katale loan” program will offer funding at just 8% annual interest – a fraction of what money lenders currently charge vulnerable traders.

This bold move directly tackles the financial exploitation many small traders face from unscrupulous lenders who often demand national IDs as collateral and charge exorbitant interest rates. During a stakeholder meeting at Fairway Hotel on May 20, Senior Presidential Advisor Moses Byaruhanga revealed the President’s personal intervention, calling it a lifeline for struggling vendors.

“We’ve heard how money lenders are profiting from your markets while making you surrender IDs illegally,” Byaruhanga told over 200 market leaders, women traders, and KCCA officials. “This government loan requires no security – just your market group’s verification. The money goes straight to your mobile phones.”

The pilot project could transform the lives of more than 10,000 vendors in Kalerwe’s 24 sub-markets alone, plus thousands more in Owino market. If successful, it will expand to other central region markets, offering a sustainable alternative to predatory lending practices that have trapped many traders in cycles of debt.

MSC officials outlined simple eligibility criteria: vendors aged 18-75 can access the loans by opening bank accounts and providing ID photocopies with their National Identification Numbers (NIN). Crucially, applicants only need endorsement from their market representatives – removing bureaucratic hurdles that often exclude small traders from formal financing.

“Funding arrives within two weeks of completing requirements,” assured MSC’s Lotah Arimureeba, emphasizing the program targets stall owners, roadside vendors, and especially women traders. The government institution, established in 2001, will provide financial literacy training alongside the loans to ensure proper utilization.

Vendor representatives expressed overwhelming support while cautioning against political interference. Owino market leader Badru Lutalo requested dedicated office space to coordinate the program, while Kalerwe’s vice chairperson Dalawusi Kibuuka pledged to mobilize colleagues.

“Let’s keep politics out of this,” urged Winnie Nalwoga from Owino’s Nyanja zone, appealing to KCCA not to complicate the process. Her sentiment was echoed by many who’ve endured muddy market conditions after earlier resisting government upgrades over misplaced fears of rent hikes or land grabs.

KCCA officials promised full cooperation, with deputy director David Musunga acknowledging ongoing challenges like inadequate toilet facilities but vowing to improve services. Julius Kasirye, KCCA’s commercial services manager, stressed the pilot’s importance: “If this fails in Kalerwe and Owino, other markets will miss out.”

The initiative directly addresses a crisis affecting Uganda’s informal sector. Many vendors currently borrow from loan sharks at interest rates exceeding 20% monthly, often surrendering IDs as collateral – an illegal but widespread practice. By providing affordable, dignified financing, the government aims to break this exploitative cycle while boosting small business growth.

State House official Hajjat Madinah Nsereko praised the rapid mobilization, underscoring the program’s potential to uplift entire communities. With MSC disbursing funds via mobile money, even vendors without traditional bank access can benefit – a game-changer for financial inclusion.

As Uganda’s bustling markets prepare for this financial revolution, all eyes are on Kalerwe and Owino to prove the model works. For President Museveni, it represents both an economic intervention and a political message – demonstrating tangible support to the hardworking vendors who form the backbone of Uganda’s informal economy.

The program’s success could redefine small business financing in Uganda, offering a blueprint for empowering low-income entrepreneurs nationwide while cutting out predatory middlemen. As word spreads, vendors across Kampala are watching closely, hoping their markets will be next to join this financial liberation movement.