By Jonan Kandwanaho
Let’s be real. The word "loan" in Uganda carries more fear than a snake in the toilet. Say it aloud in a room and watch people flinch. Some imagine loan sharks.
Others recall the sting of a bank SMS reminding them they’re late. Some flash back to the boda guy who took a loan, bought a flat-screen TV, and then lost both.
But what if I told you that a loan, by itself, isn’t a bad thing? In fact, when used right, it can be one of the fastest tracks to growth.
The real problem isn’t the loan. It’s our lack of understanding, our impulsiveness, and our silence around how loans actually work.
I once met a young man in Kisenyi who borrowed Shs1 million from a digital loan app. He didn’t read the terms. Just tapped “accept.” Thirty days later, he owed Shs1.5 million and had no idea why.
The interest was daily, not monthly. The app charged processing fees, late penalties, and hidden charges. It felt like the money had turned into a time bomb.
He came to me desperate. We sat down and broke it all down. After a long chat, he said something that stuck with me: "If someone had just explained this, I wouldn’t be in this mess."
That’s the point of this article.
Let’s start with this truth: borrowing is not a sign of failure. Some of the richest people and most successful businesses operate on loans. What separates them from the rest is knowledge, planning, and discipline.
So why do most Ugandans get it wrong? Because we borrow emotionally, not strategically. We borrow because we want to impress, not invest. We borrow in silence, then suffer in shame.
Take Sarah, a schoolteacher from Mukono. She borrowed Shs3 million to throw her daughter a lavish birthday party with a bouncing castle, DJ, and catering.
It was beautiful. But three months later, her daughter was back to eating posho and beans while Sarah dodged the bank like it was a jealous ex.
Compare that to Moses, a mechanic from Ndeeba. He borrowed Shs4 million to expand his garage. He bought more tools, trained a younger cousin, and increased his client base.
A year later, he had paid off the loan and doubled his monthly income. Same loan. Different mindset.
If it’s not going to grow you, grow your income, or bring relief in a life-or-death emergency—pause. Don’t take a loan just to look successful. That success will be a coffin if it buries your peace of mind.
Read the fine print. Ask the uncomfortable questions. How much is the interest really? Is it reducing balance or flat rate? Are there late payment penalties? Any insurance or hidden fees? If they can’t explain it clearly, run.
Be careful with digital lenders. Many of them are wolves in WiFi. They look convenient but come with crippling interest and short repayment windows.
Borrowing Shs200k today could mean paying back Shs350k next week. Don’t be fooled by how fast it is. If it’s too easy to get, it might be too hard to escape.
Borrow within your means. Don’t take Shs10 million if your cash flow can only handle Shs500,000 repayments. Stretching your budget till it snaps is how financial stress enters your blood pressure.
And before you even sign that loan agreement, ask yourself how you’re going to pay it back. I always say, if your loan plan is “we shall see,” then you shall suffer.
If the income from the money won’t start flowing in before your first installment, you’re borrowing on faith, not fact.
Be cautious with borrowing from friends. It often lacks structure, and when things go wrong, so does the relationship. If you must, write it down. Be honest. And stick to agreed timelines. A lost friendship is more expensive than any loan.
Let’s also remove the shame around borrowing. You are not foolish for taking a loan. But you become foolish when you repeat the same borrowing mistakes without learning.
I’ll leave you with this: wealth isn’t about how much you avoid debt, but how wisely you use it.
Some of you reading this have dreams that need capital. Businesses that need a push. Opportunities that need funding. A loan can be your tool, not your trap.
Talk to a financial advisor. Ask questions. Educate yourself. Don’t be too proud to learn. And don’t be too ashamed to ask.
Because in the end, a smart borrower isn’t just someone who pays back their loan. It’s someone who turns that loan into a legacy.
Borrow wisely, Uganda. Your future deserves it.
Mr Jonan Kandwanaho is the president of the Money Lenders Association of Uganda