Small & Medium Enterprise Loan

Institutional Objectives

Make a profit, serve the needs of existing clients and attract new clients.

Purpose of Loan

To finance:
• Construction/purchase/repair facilities
• Purchase Assets for the business like:

• Motor Vehicles,
• Machinery and other Fixed Assets,
• Hardware and Software for electronics,
• Personal Consumption

Loan amount & Tenor

Minimum: UGX 500,000
Maximum: UGX 20,000,000 above that is negotiable

Repayment structure

Based on the repayment capacity and on the cash flow of the client:

• Monthly installments
• Regular /irregular installments ( Amount and frequency – depending on the customer cash flow cycle or with only interest paid during the grace period )
• Lump-sum payment (principle +interest) at maturity. Only under justifiable situations like agriculture or supplies and contracts engagements.
• Mainly no grace period. However , there can be an exemption as determined at the time of appraisal

Collateral

• Fixed /Non-movable assets :

- Land: Land Titles and Land Sales agreements must be verified by the appropriate authority.

• Movable assets :

- Chattels e.g. Motor vehicles, motor cycles, machines;
- Other business Assets like stock or personal home possessions<
- Any asset(s) purchased with the loan funds

• Cash collateral at 5%
• Collateral should cover at least 125 % of the loan amount
• A reputable guarantor, must be a Landlord with proof.

Other requirements

• Must have a stable and reliable income from business or employment;
• The total loan repayment amount should not exceed 50 % of business disposable income;
• Only legal businesses can be funded.

Physical evidence process

• Loan application , receipts , photos of business, offer letter;
• Customer fills out loan application form;
• Customer provides documents as per checklist;
• Officer assesses the customer regarding ability to pay.
• Customer must have a current (chequeing) account;
• Loan Repayments are only done through designated points as per the Loan Agreement;
• Customer must present Original ID and a recent passport photo;
• Field visits to confirm existence of the project.