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Loans in Uganda - What You Need to Know

Apr 10, 2024
5 min read
Money Markets

If you are looking for a way to finance your personal or business needs, you might be interested in learning more about loans in Uganda. Loans are a form of borrowing money that you have to pay back with interest over a period of time.

There are different types of loans available in Uganda, each with its own advantages and disadvantages. In this blog post, we will provide some information on the most common types of loans, their interest rates, and their repayment terms.

We will also give you some tips on how to manage your cash flow and budget wisely when taking out a loan.

CPA Uganda April Intake

There are many types of loans in Uganda, but we will focus on four main categories: personal loans, business loans, agricultural loans, and microfinance loans.


  • Personal loans are loans that you can use for any personal purpose, such as paying for medical bills, education fees, home improvement, or buying a car. Personal loans are usually unsecured, meaning that you do not have to provide any collateral or guarantee to get the loan. However, this also means that the interest rates are higher than secured loans. Personal loans typically have a repayment period of 12 to 60 months, depending on the amount and the lender.

  • Business loans are loans that you can use to start or expand your business, such as buying equipment, inventory, or working capital. Business loans are usually secured by the assets of the business or a personal guarantee from the owner. The interest rates vary depending on the type and size of the business, the risk profile, and the lender. Business loans typically have a repayment period of 6 to 120 months, depending on the amount and the purpose of the loan.

  • Agricultural loans are loans that you can use to finance your farming activities, such as buying seeds, fertilizers, pesticides, or livestock. Agricultural loans are usually secured by the crops or animals that you produce or own. The interest rates depend on the type and seasonality of the farming activity, the market conditions, and the lender. Agricultural loans typically have a repayment period of 3 to 36 months, depending on the crop cycle and the loan amount.

  • Microfinance loans are small loans that you can use for any income-generating activity, such as trading, handicrafts, or services. Microfinance loans are usually provided by non-governmental organizations (NGOs) or cooperatives that aim to empower low-income people and promote financial inclusion. Microfinance loans are usually unsecured and have low interest rates. However, they also have strict repayment schedules and require group solidarity and peer pressure to ensure repayment. Microfinance loans typically have a repayment period of 1 to 12 months, depending on the loan amount and the income cycle.

CPA Uganda April Intake 2024

The repayment terms of loans in Uganda also depend on the type of loan, the lender, and your cash flow. Generally speaking, you have to pay back your loan in monthly instalments that include both principal and interest. Some lenders may also charge fees for processing, administration, insurance, or late payment. You should always read the loan agreement carefully and understand all the terms and conditions before signing it.

The table below gives a summary of the loan type, purpose / financing goal, repayment period and interest rates in Uganda.

Table 1 - Summarised Loan Interest Rates and Repayment Terms

Loan Type


Repayment Period

Interest Rates

Personal Loan

Medical Bills, Schools Fees, Home improvement, Buying a car

12-60 months

10%-30% per annum

Business Loan

Buying equipment, inventory/goods, working capital

6-120 months

15%-25% per annum

Agricultural Loan

Buying seeds, pesticides, livestock

3-36 months

18%-28% per annum

Microfinance Loan

income generating activities: Trading, handicrafts and services

1-12 months

20%-40% per annum

Source: Harvest Uganda Survey, November 2023

Cash Management Tips


Taking out a loan can be a helpful way to meet your financial needs, but it also comes with responsibilities and risks. You should always borrow wisely and only take out a loan that you can afford to repay. Here are some tips on how to manage your cash flow and budget when taking out a loan:


  • Plan ahead: Before taking out a loan, make sure that you have a clear purpose and a realistic plan for how you will use the money and how you will repay it. Calculate how much you need to borrow and how much you can repay each month without compromising your other expenses.

  • Compare options: Before taking out a loan, shop around and compare different lenders and their offers. Look at the interest rates, fees, repayment terms, and customer service. Choose the lender that offers you the best deal and suits your needs.

  • Pay on time: Once you take out a loan, make sure that you pay your monthly instalments on time and in full. This will help you avoid penalties, maintain a good credit history, and reduce your debt burden.

  • Save money: While repaying your loan, try to save some money for emergencies or unexpected expenses. This will help you avoid taking out.


CPA Innocent Mugisha is a Professor of Finance and Accounting with over 10 years experience in teaching Accounting and Finance related courses including Financial Accounting both at University and Professional level. His qualifications are: PhD (candidate), MBA(Finance), CPA(U), FCCA, CIPS, CTA and BCOM (Accounting). Innocent has also published various books on most topics in Accounting and Finance for Business and Professional Studies.

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