The Commercial Division of the High Court of Uganda has ruled against loan sharks who were charging a borrower Juliet Atuhaire interest rate of 17.5% which accumulated to 210% per year and reduced it to a legally acceptable rate of 33% per annum.<\/p>\n\n\n\n
The case is JAS Ventures International Limited v. Atuhaire, Civil Suit No. 676 of 2021.<\/p>\n\n\n\n
According to court records, JAS Ventures International Limited, a licensed money lender, sued Atuhaire for recovery of Shs 68,295,000.
This sum arose from a Shs 40,000,000 loan extended on August 24, 2020, with an agreed monthly interest rate of 17.5%.<\/p>\n\n\n\n
The loan was secured by the defendant\u2019s certificate of title for land situated in Kakoba, Mbarara City. The plaintiff alleged that the defendant defaulted, prompting recovery court proceedings.<\/p>\n\n\n\n
Court heard that a loan agreement dated 24th August 2020, the plaintiff advanced a loan facility of Shs 40,000,000 to the defendant at a monthly interest rate of 17.5%. The loan was for a period of three months. The defendant deposited the certificate of title for land comprised in Leasehold Register Volume 2583 Folio 15, Plot 46 Circular Road, Kakoba, Mbarara City, as security for the loan.<\/p>\n\n\n\n
In her defense, Atuhaire denied the claim and argued that the interest rate was excessive and the contract was unconscionable.
The defendant denies the claim and contends that the interest rate of 17.5% per month was excessive and amounts to an unfair term in the contract, and therefore unenforceable.\u201d<\/p>\n\n\n\n
In his ruling ,Justice Stephen Mubiru ,emphasized that although the loan agreement was voluntarily entered into, the interest charged was unconscionable and contrary to public policy.<\/p>\n\n\n\n
\u201cWhile the defendant did sign the loan agreement voluntarily and while there is no evidence that she was under any duress or pressure to do so, the stipulated interest rate of 17.5% per month is, in my view, unconscionably high,\u201d the stated .<\/p>\n\n\n\n
The judge added ,\u201cAn interest rate of 210% per annum is exorbitant by any standard and can only be described as usurious. Even though the parties are free to contract on such terms as they choose, courts of law cannot enforce terms that are manifestly unfair and contrary to public policy.\u201d<\/p>\n\n\n\n
Quoting Section 26 of the Civil Procedure Act and Section 86 of the Tier 4 Microfinance Institutions and Money Lenders Act, the court ruled: \u201cIn the circumstances, the court is empowered to intervene and revise the interest rate to a figure that is fair and just. I find that an annual interest rate of 33% is reasonable in the context of money lending in Uganda today.\u201d<\/p>\n\n\n\n
Court ordered the borrower to pay the money borrowed at an interest rate of 33% per annum.\u201d<\/p>\n\n\n\n
Justice Mubiru awarded post-judgment interest at a rate of 21% per annum from the date of judgment until full payment and ordered Atuhaire to pay the costs of the suit. The Commercial Division of the High Court of Uganda has ruled against loan sharks who were charging a borrower Juliet<\/p>\n","protected":false},"author":1,"featured_media":14194,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[65],"tags":[],"class_list":["post-14193","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-national-news"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2025\/04\/sha.webp","jetpack-related-posts":[{"id":6751,"url":"https:\/\/prowebinhost.com\/anzu\/the-high-court-has-ruled-that-unlicensed-money-lenders-cant-charge-interest-onloans\/","url_meta":{"origin":14193,"position":0},"title":"THE HIGH COURT HAS RULED THAT UNLICENSED MONEY LENDERS CANT CHARGE INTEREST ON”LOANS”","author":"UgandaUpdate","date":"September 26, 2022","format":false,"excerpt":"In another landmark case that will alter the way loan sharks operate in Uganda , the High Court has ruled that it is illegal for unlicensed money lenders to charge interest on a loan. 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Editor :msserwanga@gmail.com<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"