MASERU — High Court Judge Tséliso Monaphathi yesterday ruled that interest charged by money lenders was excessive and irregular.
The judgment sparked wild scenes of celebration by civil servants who had taken money lenders to court over high interest rates.
About 300 civil servants had lodged a lawsuit against three prominent money lending institutions for what they said were unlawful terms on their loan contracts.
They were suing Select Management Services, Afrisure (EEZY Management Services) and B-Blue Financial Services for charging high interest rates on clients.
The civil servants complained that the three companies were charging interest rates that exceeded the lawful 25 percent interest rate.
In a judgment delivered yesterday Justice Monaphathi ruled in favour of the civil servants.
“I allow this application with costs,” Monaphathi ruled.
The civil servants had asked the court to declare the contracts given by the three money lending institutions to their clients null and void.
The application was made after the civil servants had argued that they pay up to 62 percent to the money lenders, a practice which they said was prohibited under the law.
After the delivery of judgment, the civil servants rushed out of the court room cheering and ululating in celebration of their victory.
The civil servants shouted: “Re batla lichelete tseno tsa rona” (we want our money back).
Monaphathi ruled that the law regulating money lending business states that any amount exceeding 25 percent as interest rate is unlawful.
He said the law is meant to regulate money lenders.
“The legislator has brought order in the regime.
“How would they be money lenders if they were unruly horses?
“The legislator had to make a benchmark,” Monaphathi said.
Monaphathi also dismissed the money lenders’ argument that the court could not deal with the case on an urgent basis.
He said the case was urg- ent because harm against the civil servants was still continuing.
In this regard he referred to the decision by President of the Court of Appeal Michael Ramodibedi in 1991 when he was still a High Court judge.
“The judgment said when harm is continuing the court should intervene.
“The facts of this case are simple.
“The withdrawals and deductions are continuing.
“I agree that the matter was urgent,” Monaphathi ruled.
The essence of Monaphathi’s judgment is that the treasury department will stop deducting money from the civil servants’ salaries to transfer it to the money lenders.
However, the civil servants are not fully off the hook as the money lenders are intending to appeal against Monaphathi’s judgment.
An attorney representing one of the money lending companies, B-Blue Finance, Teboho Moiloa, told the Lesotho Times, after the judgment that his clients might appeal.
“I think we will have to appeal against this judgment.
“We will soon file the application to stay execution of this judgment pending finalisation of the matter by the Appeal Court,” Moiloa said.
If the application to stay execution of Monaphathi’s order is filed and upheld it would mean that the civil servants would proceed paying their debts until the Court of Appeal has decided on the case.
The money lenders’ lawyers were still to draft their grounds of appeal in the matter.
Advocate Motiea Teele, representing Afrisure, also said they will appeal against the judgment.
“Obviously we are going to appeal against this judgment,” Teele said.
During the addresses the money lenders’ lawyers said their clients were entitled to charge extra money on top of the 25 percent interest.
They said the extra charges were administrative fees.
“They are only meant to cover expenses incurred by the lenders,” they said.
