A Ugandan businessman, Arvind Patel, has been ordered by the High Court to pay Prime Finance Company Limited about UGX 1.1 billion in outstanding loan balances, interest and damages after failing to repay two loans within the agreed period.

According to court records, Patel borrowed UGX 200 million from Prime Finance in November 2013. Under the agreement, he was required to repay the principal within four months, together with interest of UGX 29 million.

The agreement also provided that any unpaid balance after the four-month deadline would attract interest of 0.75 per cent per week. Although Patel repaid most of the first loan, an outstanding balance of UGX 37 million remained.

That balance later accumulated to UGX 132 million, prompting Prime Finance to seek recovery through court proceedings. Before fully clearing the first loan, Patel had obtained another loan from the same company.

In 2014, Patel borrowed an additional UGX 130 million under a second agreement that also required repayment within four months. Like the first agreement, the second loan provided for interest of 0.75 per cent per week on any amount that remained unpaid after the deadline.

However, court records showed that Patel did not repay the second loan within the agreed period. By the time Prime Finance pursued the matter in court, the outstanding amount had reportedly grown to UGX 992 million.

In his ruling, Justice Boniface Wamala found that Patel had breached both loan agreements by failing to repay the money within the stipulated periods.

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The judge ordered him to pay UGX 132 million arising from the first loan and UGX 992 million from the second loan. The court also awarded Prime Finance UGX 20 million in aggravated damages. According to the report, the total amount Patel is required to pay, including the outstanding sums and damages, is approximately UGX 1.144 billion, in addition to the UGX 450 million he had already paid. Justice Wamala held that the evidence presented in court showed that the two loans had not been fully repaid as required under the agreements. The ruling highlights how unpaid balances and contractual interest can cause debts to increase significantly over time.