The law and the loan sharks

Abstract

Preface provided by author:

This dissertation will examine the problem of high interest rates charged by microlending institutions and endeavour to assess ways in which the interest rates charged by these microlending institutions in Namibia can be regulated by law so as to eradicate the exploitative advantage that the micro lenders presently have. It will also examine the use of standard form contracts by these institutions, and the problems created by their use such as unequal bargaining power, which in turn results in the imposition of unfair contractual terms on the weaker party

Chapter one will set out the problems of the microlending industry, namely, the charging of high interest rates and the problems associated with the use of standard form contracts. Chapter two will investigate the problem of usury (high interest rates) and how the problem was dealt with in the past; it will also set out the common law rule that governs usury. Chapter three will question the legality of standard form contracts, in light of the concepts of freedom of contract, negotiation and consent of both contracting parties. After having indicated the problems related to the microlending industry in chapters one, two and three, Chapter four will then discuss what the Namibian legislature has done to curb these problems. It will look at whether what has been done is enough and criticise where necessary. Chapter five will discuss the problems associated with the fixing of an interest rate as an approach of regulating these institutions and will contain the recommendations and the conclusion