“No river flows free to the sea without passing through rocks”, an old proverb that framed Wednesday’s Women’s Day debate at Jinja’s Source of the Nile Hotel.
Heifer International Uganda had convened women entrepreneurs to mark International Women’s Day, but the session quickly turned on the barriers to GROW funds and other loan schemes.
Speaker after speaker, mostly women running micro‑businesses, accused commercial banks of rigidity: managers “sweet‑talk on radio stations and newspapers” about easy loans, yet demand land titles and deeds as security even for government‑backed financing.
Male allies in the hall joined in, saying banks milk savers while ignoring vulnerable groups like the women, youth, people with disabilities.
Several recalled President Yoweri Museveni’s impatience at a State Lodge Kityerera meeting last year, when leaders reported the same complaint that GROW access was being tied to collateral.
GROW (the Generating Growth Opportunities and Productivity for Women Enterprises) project, is a Ugandan government programme funded by a World Bank grant, run by the Ministry of Gender, Labour and Social Development and PSFU.
It channels loans (UGX 4 million–200 million, 10 % interest), training and apprenticeships to women‑owned MSMEs and refugees. The money moves through participating banks as a credit facility, partly incentivized by grants for good repayment.
Calm came when Andrew Kasujja, Intervention Manager for Rural and Agricultural Finance at Financial Sector Deepening Uganda (FSDU), took the floor.
FSDU is an independent initiative that works with banks, insurers, fintechs and government to broaden access to finance especially in rural and agricultural markets. It funds pilots, research and policy dialogue to make financial services more inclusive and practical for low-income households and smaller enterprises.
“Banks do not ask for collateral just to be difficult,” he said. “A loan is someone else’s savings put to work; regulators require banks to keep deposits safe while earning a prudential return.” He explained that collateral—land, titles, equipment—acts as fallback when cash flows falter, lowering interest rates and freeing credit for others. The wider mandate of commercial banks, he added, is deposits, payments and intermediation under Bank of Uganda rules.
Kasujja then jabbed at a common Ugandan sidestep: “Don’t send money to this number—I have got loan issues.”
He called it a small‑talk confession of dodged repayment, even on friend‑to‑friend loans. When advances are treated as gifts and SIMs hidden to avoid collectors, trust corrodes; lenders’ “character” score drops, and future credit dries up.
Kasujja walked the room through the 4 Cs—Character (willingness to repay), Capacity (cash flow), Capital (own equity), Collateral (pledged assets)—and said character comes first: without willingness, strong cash flow still defaults. “Together the 4 Cs balance profit with the duty to protect depositors and keep the credit pipe open,” he warned.
The audience heard echoes in recent research. Makerere’s 2023 household survey (Bwanika) found urban borrowing driven by school fees, health bills and stock, but limited by high rates and collateral fear—recommending flexible schedules and literacy drives.
Another 2023 study in Kawempe SACCOs (Ainebyoona) said peer pressure and frequent follow‑ups helped repayment; it urged better records, mobile reminders and group guarantors.
A 2024 study of Tugende boda‑boda borrowers (Ahabwe) showed grace periods and quick bike repairs improved repayment; it advised income‑aware rescheduling. J‑PAL’s 2008‑09 Uganda Microfinance trial found small bonuses and public recognition nudged on‑time repayment.
Together they paint borrowers as willing but cash‑constrained, responsive to clarity, flexibility and respect rather than rigid demands.
Kasujja’s lesson landed against Uganda’s history of “akasimo” loans, a bar‑talk idea of political thank‑yous for votes.
The Entandikwa start-up capital credit scheme was introduced in Uganda in the 1994/95 financial year when CA elections had concluded with official launch in early 1995 in Kapchorwa district.
It was designed as a revolving fund to alleviate poverty and assist small-scale entrepreneurs but it largely failed due to poor loan repayment as some people took it for ‘akasimo’or thank you money.
Sadly, the ledger of unpaid favors in Uganda is sometimes written in blood. Last year police recorded several cases of fights between brothers over a soft loan of 200,000; the older one was buried a week later.
In another town, former roommates who built a poultry business together now keep to opposite sides of the taxi park after a soft loan disappeared into school fees and neither would concede.
These are extremes, but they echo a daily quiet: friends who cross the street to avoid each other, workplace WhatsApp groups gone mute, sisters sharing market stalls but not words.
Globally, economies grow because people borrow and repay because repayment is how strangers trust one another at scale, how cash saved today becomes machines, roofs and wages tomorrow.
If Uganda’s entrepreneurs want GROW to be a springboard, not another ghost fund, the character habit has to shift: loans—whether from banks or buddies—are promises, not akasimo.
Paying them back is not just banking discipline; it’s how communities stop burying brothers and start building businesses.
