The Minister of Finance in Uganda has issued a legal notice
setting a maximum interest rate for money lenders at 2.8% per month
(or 33.6% per annum). The legal notice, issued under the Tier 4
Micro Finance Institutions and Money Lenders Act (Cap. 61), applies
to money lenders and not to other licensees under the Act such as
non-deposit-taking micro-finance institutions or SACCOs.
Charging interest above the prescribed interest constitutes an
offence, and on conviction, a money lender is liable to a fine of
up to UGX 1,000,000/=. Additionally, a court may order cancellation
of the money lender's licence and require that the money
lender repay the borrower any excess interest charged.
