‎Most aspects of life are highly transactional in nature. Therefore, most of life is characterized by borrowing and lending. These transactions give rise to attendant legal risks, principal among them, breach of agreements and the terms thereto with regard to borrowing transactions.

Over time, lending entities have developed the practice of advancing credit facilities with a security of sorts. Due to the financial implications related to lending, the practice of charging interests on sums advanced as credit has evolved, even leading to legislation to govern interests on credit facilities advanced by banks.

Due to the power imbalance between financial institutions and borrowers, it is obvious that there is need to cushion borrowers against the chilling effect created by the power imbalance. Banking institutions to this end have developed regulations on lending in order to protect their interests. There is legislation backing these regulations.

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