PDM’s Shs1 Million Test: Businesses Born, Repayment Uncertain

Each morning, Lilian Nabukela, a resident of Kiti A, Kasangati Town Council in Wakiso District, opens the kiosk she built with support from Uganda’s Parish Development Model (PDM). A fridge keeps soft drinks cold, giving her a modest but steady income. 

But while the business has helped her survive, Nabukela remains uneasy. She says she has not been sensitised about when or how she is expected to repay the money she received.

“When I got the money in 2023 under Horticulture enterprise, I tried farming, but poor seasons failed me. So I bought a fridge and started selling drinks. It helps me survive… but I don’t know when or how I’m supposed to repay,” she said.

Nabukela’s experience captures both sides of the PDM: a programme that has created economic opportunities for some households, but whose future as a revolving fund is increasingly being tested by weak monitoring, poor sensitisation and uncertainty over repayment.

Launched in 2022, PDM was Uganda’s ambitious attempt to move households from subsistence into the money economy. Each parish was allocated Shs100 million as a revolving fund, with beneficiaries accessing Shs1 million to start enterprises.

But at the grassroots, some beneficiaries say they were not adequately informed about the conditions attached to the money.

At Kiti A, LC1 chairperson Ephrahim Jooga recalls that local leaders were initially excluded from monitoring PDM beneficiaries.

“They only selected themselves and did enterprises and got that money. It’s until when it came to refunding… that they started involving us,” Jooga says.

Jooga says local leaders were brought on board when repayment became an issue, prompting him to begin tracking the 67 beneficiaries in his village.

During the process, he says he uncovered cases of bribery during registration, as well as confusion among some residents who believed the money was a grant rather than funds that would have to be repaid.

Despite the challenges, Jooga believes PDM has encouraged residents to work harder and reduced idleness in his village, partly because beneficiaries know inspections could happen at any time.

At Kasangati Town Council, Deputy Town Clerk Haruna Sebi describes a structured selection process with oversight by the Resident District Commissioner.

“One important consideration is whether the applicants are residents of the area. The rating committee also includes the LC1 chairperson, who is important in identifying the beneficiaries and verifying their residence. We also have the RDC, who monitors our activities,” said Sebi.

He says although repayment has not yet begun, the rollout of the Wendi system is expected to streamline the process.

At the national level, PDM Secretariat spokesperson Silvester Nyombi says Shs4.2 trillion has been capitalised in SACCO accounts across 10,589 parishes, with Shs3.5 trillion reaching 3.5 million beneficiaries.

Nyombi says repayment is only beginning because beneficiaries are given a two-year grace period before they start refunding the money.

“If you got this money, make sure you repay it within the timeframe so that you enable somebody else to also benefit,” Nyombi says, framing repayment as a responsibility to other potential beneficiaries.

But while the government says repayment is beginning, beneficiaries such as Nabukela say they remain unclear about when and how they are expected to make the repayments.

The uncertainty comes as questions about the implementation and accountability of PDM continue to emerge.

Parliament’s Public Accounts Committee has called for stricter adherence to PDM guidelines.

Betty Nambooze, chairperson of the Committee on Local Government, warned that poor accountability could undermine the programme.

“People would get money, just eat it… even some of the SACCOs are non-existent. Repayment is still very uncertain,” she says.

The Auditor General’s January 2026 report reinforced these concerns. It confirmed that Shs3.258 trillion had been released up to the financial year 2024/25, with 84 percent reaching households, while Shs508.6 billion remained undisbursed.

The report also flagged ghost projects, duplicate payouts and weak recovery mechanisms. Only Shs9.34 billion had been recovered from 18,105 beneficiaries.

The concerns have now reached the highest level of government.

President Yoweri Kaguta Museveni has linked some of the resentment among citizens at the local level to alleged theft and diversion of PDM funds by local leaders and other officials.

“Apparently, this local corruption where you have the LCs or some of the leaders taking the PDM money, that’s how you get local resentment,” Museveni said on August 7, 2026, while addressing members of the NRM Parliamentary Caucus at Speke Resort Munyonyo in Kampala.

Museveni directed Prime Minister Robinah Nabbanja to instruct Minister for Local Government Balaam Barugahara to investigate allegations of theft and corruption involving PDM funds in a number of districts.

The President urged MPs and local leaders to monitor the programme, expose diversion and ensure that beneficiaries receive the intended support.

Despite the concerns, Museveni described PDM as a potentially transformative programme if properly implemented.

“PDM is a game changer for your people,” he told the MPs.

State Minister for Local Government Justine Namere also acknowledges the need to strengthen oversight.

“We are sitting on a time bomb of a leakage… trillions of money are going to PDM, but this money is being stolen,” Namere said last week while appearing before Parliament’s Public Accounts Committee on Local Government.

She urged MPs to spend three weeks in their constituencies verifying PDM projects and demanding accountability.

For economist Fred Muhumuza, the concerns over repayment are important because PDM was designed as a seven-pillar programme, making it more comprehensive than previous government interventions.

“The intention was to create a revolving fund… within five years, the fund could grow to Shs500 million in that locality, provided beneficiaries repaid the money,” he explains.

Muhumuza also comments on the decision to allocate Shs1 million to individual beneficiaries.

“We thought that one million shillings was a good starting point, but the amount was supposed to be monitored. Some people might need more. However, the decision was also informed by historical data, which showed that most of the people being targeted were not borrowing more than one million shillings.

“Therefore, one could assume that providing one million shillings would cover the basic needs of perhaps 90 per cent of those who would otherwise have gone to moneylenders or savings groups,” said Muhumuza.

With Shs4.4 trillion allocated to PDM in the financial year 2026/27, the programme now faces a critical test.

It has already reached millions of households and supported enterprises such as Nabukela’s kiosk. But its long-term success will depend on whether beneficiaries can sustain their enterprises, understand and meet their repayment obligations, and whether government can strengthen monitoring and protect the funds from leakages.