This paper is a discussion of repayment behaviour as a variable that mediates the relationship between transaction cost and Trade credit supply among manufacturing firms of Uganda. The study also thought to address repayment behaviour as a knowledge gap which other studies on Trade credit supply did not address. This study also sought to establish whether repayment behaviour influences Trade credit supply. The study took a correlational cross sectional survey approach and employed both qualitative and quantitative approaches. The sample size was 91 firms out of a population of 118 firms with three respondents from each firm and with data analysed using SPSS version 20. We made sure that Validity and reliability of the instruments were both done. Results from the study indicate that transaction cost as an independent variable was a positive predictor of Trade credit supply while repayment behavior (mediator) was not a significant predictor.

Keywords : Manufacturing firms, trade credit Supply, repayment behaviour, character, capacity.