Regulatory Alerts2018-01-01
Hire Purchase and Credit Sale (Charges) Regulations, 2018
Issued by the Minister of Finance, Trade and Economic Planning, these regulations impose mandatory charging frameworks for hire purchase and credit sale agreements by capping the annual percentage rate at 22.50 percent, calculated using a diminishing balance method with prescribed formulas. They require minimum down payments of 10 percent for hire purchase and 50 percent for credit sale, limit repayment periods to 48 months for the former, and mandate that dealers display labels stating the applicable rate alongside standardized payment schedules. Furthermore, the rules strictly cap late payment surcharges at 8 percent above the annual rate, cancellation fees at 10 percent of the cash price, and early settlement fees to the equivalent of two months' charges.