Ecobank Uganda has launched a digital lending facility that gives eligible merchants access to up to Shs70 million in short-term working capital, using their digital transaction history rather than physical collateral to determine borrowing limits.
The Electronic Merchant Cash Advance (eMCA) is available to businesses collecting payments through Ecobank’s point-of-sale (POS) terminals, web and QR channels.
Merchants qualify after establishing at least three months of transaction history, after which an automated credit-scoring system determines the facility limit. Borrowing can reach up to 50% of a merchant’s average monthly digital collections.
The facility is disbursed digitally once a merchant accepts the offer and confirms the transaction using a one-time password. Repayment is made in a single settlement within 30 days and automatically deducted from the merchant’s collection flows.
Ecobank said the facility requires no collateral, paperwork or branch visit.
The product is aimed at addressing a longstanding financing gap for small and medium-sized businesses, which often struggle to access conventional credit because of collateral requirements. Businesses with regular sales can also face short-term cash-flow gaps that constrain their ability to restock, pay suppliers or meet increased demand.
Speaking at the launch, Ecobank Uganda Managing Director Grace Muliisa said the facility was designed to support Uganda’s economic growth ambitions by making working capital more accessible to smaller businesses.
“Uganda has set itself the ambition of growing its economy tenfold by 2040, and no economy grows tenfold on the back of large corporates alone. It grows when the supermarket in Kabalagala, the hotel in Jinja and the clinic in Mbarara can all finance their next order without pledging a land title. eMCA is our contribution to that national agenda. It takes the everyday commerce Ugandan businesses already generate and turns it into credit, at speed and at scale. When capital moves faster through the real economy, inventory turns faster, suppliers are paid on time, jobs are created, and tax revenue grows. That is how a banking sector participates in national transformation rather than merely observing it.”
The facility uses transaction data generated through digital payments to build a record of merchants’ sales and inform credit decisions. As businesses process more payments through Ecobank’s channels, their transaction history can support access to financing.
Emmanuel Kikoni, Ecobank Uganda’s Head of Cash Management, said the model shifts the focus of SME lending from traditional measures of collateral to actual business performance.
“For decades, the question a Ugandan business heard from its bank was, ‘ What do you own. eMCA replaces that with a better question: what do you sell. We already see the pulse of a merchant’s business in their collections, so the credit decision can be made by a scoring engine in minutes rather than by a committee in weeks, and repayment can be collected automatically from the same settlement flows that earned the limit in the first place. That is a genuinely new operating model for lending in this market. It has been tested end to end with Ugandan merchants, and it runs on the same digital collections and cash management rails our clients already use every day. Innovation, for us, is not a pilot in a laboratory. It is a product a merchant can draw down before lunchtime.”
The initial rollout targets businesses in retail, hospitality, food and beverage, fuel, health and leisure—sectors the bank identifies as having frequent transactions and relatively consistent daily cash flows.
The facility carries an access fee of 3%, according to Evans Katwebaze, Head of SME and Value Chain at Ecobank Uganda.
“At our SME Breakfast, business owners told us plainly that the difference between growing and standing still is often a few days and a few million shillings. A restaurant that cannot restock on a Friday loses the weekend. A hotel that cannot pay a supplier loses the booking. eMCA is built for that moment. It is unsecured, it is priced transparently at a three percent access fee, it is available up to fifty percent of a merchant’s average monthly collections, and it is repaid quietly out of settlements so the owner can concentrate on trading. Just as importantly, it rewards formalisation. The more a business channels its sales through formal digital collections, the more visible its performance becomes and the larger the facility it can command. That is a value proposition that grows with the customer rather than gating them at the door.”
The model effectively links merchants’ payment activity to their potential access to short-term working capital.
Its initial reach, however, is limited to businesses already using Ecobank’s digital collection channels. The bank said it plans to extend the service to newly onboarded businesses as it expands its acquiring network.
The launch comes as Uganda pursues its Tenfold Growth Strategy, which aims to expand the economy from about US$50 billion to US$500 billion by 2040, with private-sector and SME growth forming part of the broader economic transformation agenda.
Merchants interested in the facility can contact their Ecobank relationship managers or visit an Ecobank Uganda branch to begin collecting payments through the bank’s digital channels.
The eMCA adds lending to Ecobank’s existing digital payments, collections and cash-management services, using transaction flows as the basis for assessing and extending short-term working capital.