Businessman ordered to pay Shs 1.1bn interest on Shs 330m loans

What the report says

Kampala businessman Arvind Patel has been ordered by the High Court to pay Prime Finance Company Limited more than Shs 1.1 billion linked to two unpaid loans that originally totalled Shs 330 million. Justice Boniface Wamala also granted the lender Shs 20 million in aggravated damages and ordered Patel to cover the costs of the case.

According to court records cited by The Observer, Patel first borrowed Shs 200 million in November 2013 and was required to repay the principal within four months, along with Shs 29 million in interest. The second loan, worth Shs 130 million, was taken in 2014 under similar repayment terms. In both agreements, any unpaid balance after the deadline attracted interest of 0.75% per week.

The court found that Patel did not repay the loans within the agreed periods. The judgment says the remaining balance on the first loan rose to Shs 132 million, while the second loan grew to Shs 992 million by the time Prime Finance went to court. Together, those sums brought the total to Shs 1.124 billion before damages. The court also ordered that the outstanding amounts continue to attract 18% annual interest until fully settled.

The case underscores how quickly debt can escalate when high default interest is applied and payment deadlines are missed. The ruling is also a reminder of how commercial loan disputes are enforced in Uganda’s High Court.