By Eddie Mugulusi
Let’s talk about something that’s quietly killing small businesses in Uganda every single day.
Credit.
Yep—those friendly “You’ll get your money next week” transactions. The “I just need two weeks” promises. The sweet-talking customers who vanish like airtime when you need them the most.
If your small business is still in its early stages, hear me loud and clear:
Avoid credit.
Run from it like it’s a WhatsApp group full of motivational speakers.
Let me explain why.
My Ketchup Credit Catastrophe
Years ago, when we had just started out in manufacturing, I had a dream.
A beautiful, naïve dream.
We had just developed a killer tomato ketchup recipe—different taste, real ingredients, and a whole vibe. So naturally, I thought: Let’s get this thing into supermarkets and blow up!
Now if you’ve ever worked with supermarkets, you probably already know what’s coming.
They wanted our product on consignment.
Fancy word, simple meaning:
We deliver the ketchup.
They sell it.
Then—and only then—do we get paid.
Sounds harmless, right?
Except… no one was running into supermarkets screaming, “Where’s the new ketchup!?”
We had to build awareness. Educate customers. Push trial. All of that takes time.
So what happened?
Our money sat on shelves. Literally.
For months.
Cartons of ketchup gathering dust, not sales.
Meanwhile, back at the factory—we’re broke. Staff needs to be paid. Raw materials need restocking. But all the cash is stuck in bottles.
That’s when it hit me:
A small business cannot afford to be that patient.
You need cash to survive. To pay bills. To breathe.
Let’s Do the Math Together
Say your business needs UGX 10 million every month to operate.
Rent, salaries, inventory—the usual suspects.
You’re expecting to bring in UGX 13 million in revenue. That gives you UGX 3 million profit. Not bad, right?
But what if, by the end of the month, you’ve only collected UGX 7 million?
Where’s the rest?
Oh, it’s still “with customers.”
“Coming soon.”
“In transit.”
Now you’ve got a UGX 3 million hole to fill just to stay afloat. So you go get a loan. Dip into savings. Beg a friend.
Next month? Same story. And the next. And the next.
Sooner or later, there’s nothing left to borrow.
And just like that—your business collapses.
But Wait, There’s More (Frustration)
Uganda has a serious bad repayment culture.
People will sell every last item you gave them, then look you in the eye and say:
“Boss, the money isn’t there.”
Excuse me?
You sold the goods.
You got the money.
Where is it now?
You’d think they were paying school fees for every child in Kampala.
And the worst part?
This isn’t rare. It’s actually… normal.
So if your entire business model relies on hopeful credit recovery, you’re in trouble.
What You Should Do Instead
1. Work With Paying Customers First
Cash is king. If a customer can pay upfront, that’s your MVP.
2. Test Before You Trust
If someone insists on credit, start small. Give them what you’re willing to lose.
If they pay back—great. Slowly increase.
If they disappear—you just dodged a landmine.
3. Put Everything in Writing
A verbal promise isn’t protection.
Create a simple repayment agreement—signed. That paper may save your sanity (and your capital).
4. Protect Your Working Capital Like Your Last Born
Running capital is oxygen.
Don’t starve your business while your stock gathers dust in someone else’s shop.
In Conclusion…
Your small business is not a microfinance institution.
It’s not your job to bankroll people’s dreams while yours dies quietly in a spreadsheet.
You need cash to build, grow, survive.
So the next time someone says,
“Just give it to me—I’ll pay you soon,”
pause and ask yourself:
“Can I afford to float this person’s life while mine is sinking?”
If the answer is no, smile politely—and keep your product.
Your future self will thank you.
Unlock your true potential 