Amortization

The gradual repayment of a debt over time through regular scheduled payments that cover both principal and interest. Each payment reduces the outstanding balance until the debt is fully paid off. Example: A boda-boda rider in Kampala takes a motorcycle lease of UGX 3,000,000 over 18 months. Each daily payment of UGX 12,000 covers principal and fees until the bike is fully paid off.