Kitgum business community raises concern over high-interest loans

23 October 2026, 10:26 am

By Otim Moses

The business community in Kitgum District has appealed to the government to intervene over high-interest loans that are crippling small businesses and forcing residents to leave town for villages.

The concern was raised during a community baraza held on 19 October 2026 in Kony Paco Cell, West Land Parish, Central Division, Kitgum Municipality. The baraza was organised by Reproductive Health Uganda (RHU), in partnership with ADRA Uganda, under the STRENGTH Project, which provides safe platforms for communities to discuss social and structural barriers to household wellbeing.

Traders said daily repayment loans with interest rates of 20–30 per cent were pushing families deeper into poverty and leading to the confiscation of property.

Alaro Patricia Hope, a resident of Kony Paco, said micro-lenders started collecting repayments on the evening after disbursing loans, before borrowers had invested the money.

“Small loans in town attract interest rates of 20–30 per cent. After borrowing in the evening, they start collecting money when you have not yet invested it in any business,” she said.

She said many people preferred loans from Banyankole lenders because they were quick and reliable compared with bank loans, which require extensive documentation. However, she called on district leaders and the government to intervene before more property was lost.

Acan Jackline, also from Kony Paco, said children were failing to attend school because loan repayment had become a priority, while debt had become a major burden on household finances.

Atimango Beatrice said some borrowers lacked a clear purpose for taking out loans, noting that some borrowed money to buy food, a practice she said had entrenched household poverty.

Acan Jacky, a resident of Kony Paco, advised borrowers to seek bank loans that are repaid monthly rather than daily.

Hon. Santa Latabo, a village health team member and Local Councillor III for West Land Parish, appealed to residents to form groups to benefit from government programmes aimed at fighting poverty instead of turning to quick loans, which she said had contributed to gender-based violence (GBV) and poverty.

Ocaya Alexis, a stakeholder who facilitated the RHU programme, said residents were experiencing health challenges due to loan-related stress, with some leaving town because of pressure from lenders.

He urged residents to form groups to benefit from government programmes such as the Northern Uganda Social Action Fund (NUSAF 4). He also called on local leaders to monitor and strengthen savings and credit cooperative organisations (SACCOs) and regulate high interest rates.

In addition, he appealed to residents to reduce alcohol consumption, which he said contributed to 80 per cent of poverty in the area.

The Community Development Officer for Central Division, Kitgum Municipality, Okot Andrew Dave, advised residents to apply for affordable government loans rather than high-interest microloans.

He cautioned borrowers against leaving their national identity cards with lenders and urged them to understand loan terms and conditions before signing agreements to avoid gender-based violence and family breakdowns.