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.<\/p>\n\n\n\n
In a decision delivered by the High Court \u00a0Justice Esta Nambayo- money lenders without licences under the Microfinance Institutions and Money Lenders Act, 2016, cannot sue borrowers for breach of agreement.<\/p>\n\n\n\n
\u201cThe defendant\u2019s conduct of lending money to the plaintiff without a money lender\u2019s licence contravened Section 84 (1) a of the Tier 4 Microfinance Institutions and Money Lenders Act, 2016 and it was, therefore, illegal and wrong for her to levy interest of 20 percent or at all on 20 percent on the principal sum of Shs10m that was lent to the plaintiff,\u201d Justice Nambayo ruled.<\/p>\n\n\n\n
The decision follows a suit that was filed by one Shilla Ninsiima who in 2016 lent Shs10m to Mr Kagumaho Kakuyo at an interest rate of 20 percent, payable in one month. According to evidence adduced in court Mr Kakuyo failed to pay the interest as per the loan agreement .<\/p>\n\n\n\n
Court documents show that on December 9, 2017, the two parties further entered into another -debt discharge agreement whereby they agreed that the outstanding amount had increased to Shs42m to which Mr Kakuyo made a payment of Shs24m.<\/p>\n\n\n\n
\u201cIn March, 2018, the plaintiff (Mr Kakuyo) was summoned to police on charges of issuing cheques that were dishonoured. It is the plaintiff claim that while in police custody, the defendant (Ms Ninsiima) with the help of police, forced him to sign acknowledgement that the outstanding amount of the loan was Shs78m hence this suit,\u201d the court documents read in part.<\/p>\n\n\n\n
Justice Nambayo after considering all the evidence and facts of the matter ,ruled that Mr Kakuyo was not indebted to Ms Ninsiima of Shs53m since he signed the loan agreement under duress while in police custody Ms. Ninsiima was not a licensed money lender under the law.<\/p>\n\n\n\n
\u201cIt is hereby, declared that the plaintiff (Mr Kakuyo) is neither liable nor indebted to the defendant (Ms Ninsiima) in respect of a loan of Shs10m nor in any amount arising therefrom as interest from the money borrowed,\u201d Justice Nambayo stated in her ruling.<\/p>\n\n\n\n
She added ; \u201cA permanent injunction is hereby, issued restraining the defendant (Ms Ninsiima), her agents or any one acting on her instructions from enforcing and or making any attempts to recover any money arising from the Shs10m that the plaintiff (Mr Kakuyo) borrowed from the defendant.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
In another landmark case that will alter the way loan sharks operate in Uganda , the High Court has ruled<\/p>\n","protected":false},"author":1,"featured_media":6688,"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-6751","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\/2022\/09\/Nambayo.jpg","jetpack-related-posts":[{"id":14193,"url":"https:\/\/prowebinhost.com\/anzu\/justice-mubiru-rules-against-high-interest-rate-on-loan-offered-by-a-money-lender\/","url_meta":{"origin":6751,"position":0},"title":"Justice Mubiru Rules Against High Interest Rate On Loan Offered By A Money Lender","author":"UgandaUpdate","date":"April 2, 2025","format":false,"excerpt":"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. The case is JAS Ventures International Limited\u2026","rel":"","context":"In "National News"","block_context":{"text":"National News","link":"https:\/\/prowebinhost.com\/anzu\/category\/national-news\/"},"img":{"alt_text":"","src":"https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2025\/04\/sha.webp","width":350,"height":200},"classes":[]},{"id":12143,"url":"https:\/\/prowebinhost.com\/anzu\/bou-issues-new-directives-to-deal-with-un-licenssed-digital-money-lending-apps\/","url_meta":{"origin":6751,"position":1},"title":"BoU Issues New Directives To Deal With Un-licenssed Digital Money Lending Apps","author":"UgandaUpdate","date":"June 9, 2024","format":false,"excerpt":"Due to the increased number of unlicensed digital lending apps where man unsuspecting Ugandans have been scammed and lost money in billions of shillings, \u00a0Bank of Uganda has directed the digital lenders to carry out due diligence through holding valid licenses and obtain confirmations from Uganda Microfinance Regulatory Authority. In\u2026","rel":"","context":"In "National News"","block_context":{"text":"National News","link":"https:\/\/prowebinhost.com\/anzu\/category\/national-news\/"},"img":{"alt_text":"","src":"https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2024\/06\/R.jpg","width":350,"height":200,"srcset":"https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2024\/06\/R.jpg 1x, https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2024\/06\/R.jpg 1.5x, https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2024\/06\/R.jpg 2x, https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2024\/06\/R.jpg 3x"},"classes":[]},{"id":1443,"url":"https:\/\/prowebinhost.com\/anzu\/banks-put-on-notice-employees-will-no-longer-be-held-liable-for-salaried-loans-if-wrongful-dismissed-from-their-jobs\/","url_meta":{"origin":6751,"position":2},"title":"BANKS PUT ON NOTICE EMPLOYEES WILL NO LONGER BE HELD LIABLE FOR SALARIED LOANS IF WRONGFULLY DISMISSED FROM THEIR JOBS.","author":"MOSES SSERWANGA","date":"July 8, 2020","format":false,"excerpt":"BY OUR SPECIAL LEGAL CORRESPONDENT Uganda\u2019s Court of Appeal has passed a landmark decision that could curtail commercial banks\u2019 notorious practice of hawking \u2018salaried loans\" for white and blue-collar workers. In their majority decision ,the\u00a0 Court of Appeal has upheld a judgement that was handed out by the Industrial Court\u2026","rel":"","context":"In "Business"","block_context":{"text":"Business","link":"https:\/\/prowebinhost.com\/anzu\/category\/national-news\/business-national-news\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2030,"url":"https:\/\/prowebinhost.com\/anzu\/uganda-bankers-association-joins-diamond-trust-bank-to-appeal-hamis-kiggundu-high-court-decision\/","url_meta":{"origin":6751,"position":3},"title":"UGANDA BANKERS ASSOCIATION JOINS DIAMOND TRUST BANK TO APPEAL HAMIS KIGGUNDU HIGH COURT DECISION","author":"UgandaUpdate","date":"October 9, 2020","format":false,"excerpt":"The Uganda Bankers Association which brings together 35 financial institutions in the country has joined Diamond Trust Banks (Uganda) and (Kenya) to appeal and stay execution of the orders of the High Court in a case that was filed by Kampala businessman Hamis kiggundu. The Uganda Bankers Association that includes\u2026","rel":"","context":"In "National News"","block_context":{"text":"National News","link":"https:\/\/prowebinhost.com\/anzu\/category\/national-news\/"},"img":{"alt_text":"","src":"https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2020\/10\/Diamond-Trust-Bank-ATMs.png","width":350,"height":200,"srcset":"https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2020\/10\/Diamond-Trust-Bank-ATMs.png 1x, https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2020\/10\/Diamond-Trust-Bank-ATMs.png 1.5x, https:\/\/prowebinhost.com\/anzu\/wp-content\/uploads\/2020\/10\/Diamond-Trust-Bank-ATMs.png 2x"},"classes":[]},{"id":7560,"url":"https:\/\/prowebinhost.com\/anzu\/bou-to-regulate-saccos-with-shs1-5b-in-savings\/","url_meta":{"origin":6751,"position":4},"title":"BoU to regulate Saccos with Shs1.5b in savings\u00a0","author":"UgandaUpdate","date":"December 7, 2022","format":false,"excerpt":"Bank of Uganda has proposed amendments to the Microfinance Deposit-Taking Institutions Act to regulate at some 42 Savings and Credit Cooperative Societies (Saccos) whose savings have hit Shs1.5b.\u00a0 The new regulation will be effected under the Micro Finance Deposit-taking Institutions (Registered Societies) Regulations, 2022. \u00a0 Dr Tumubweinee Twinemanzi, \u00a0the Bank\u2026","rel":"","context":"In "Finance"","block_context":{"text":"Finance","link":"https:\/\/prowebinhost.com\/anzu\/category\/finance\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6687,"url":"https:\/\/prowebinhost.com\/anzu\/financial-intelligence-authority-has-no-powers-to-order-the-freezing-of-bank-accounts\/","url_meta":{"origin":6751,"position":5},"title":"FINANCIAL INTELLIGENCE AUTHORITY HAS NO POWERS TO ORDER THE FREEZING OF BANK ACCOUNTS","author":"UgandaUpdate","date":"September 18, 2022","format":false,"excerpt":"The High Court in Kampala has ruled that the Financial Intelligence Authority (FIA) has no powers to order the freezing of bank accounts of individuals or organisations suspected to be involved in terrorism \u00a0financing. 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