| (1) | If a borrower or credit receiver or lessee fails to pay any amount which is owing by him to a moneylender or credit grantor or lessor in connection with a money lending transaction or a credit transaction or a leasing transaction, upon the date when such amount is payable, or if a borrower or credit receiver or lessee enters into an agreement with a moneylender or a credit grantor or a lessor to defer the payment of an amount which is owing by him as aforesaid to the moneylender or credit grantor or lessor, the moneylender or credit grantor or lessor shall thereupon be entitled to recover from the borrower or credit receiver or lessee an additional amount in respect of finance charges which shall be calculated by reference to— |
| (a) | the total amount which is payable but is unpaid; |
| (b) | the term during which the default continues or the term for which payment is deferred as aforesaid, as the case may be; and |
| (2) | For the purposes of the calculation contemplated in subsection (1), the total amount referred to in subsection (1)(a) shall include additional amounts in respect of finance charges, if they are in terms of subsection (3) deemed to be unpaid. |
| (3) | Additional amounts of finance charges calculated in accordance with the provisions of subsection (1) shall be deemed to be unpaid— |
| (a) | in the case where a borrower or credit receiver or lessee is not required to effect regular payments, if the borrower or credit receiver or lessee fails to pay an additional amount of finance charges which is recoverable from him in terms of subsection (1), on a determined or determinable date specified in the instrument ofdebt, or, if no instrument of debt has been executed, on the date agreed upon by the parties or on a date determined by trade usage, as the case may be: Provided that such an agreement (excluding any trade usage) relating to a date shall, for the purposes of the Conventional Penalties Act, 1962 (Act No. 15 of 1962), be regarded as a penalty stipulation; or |
| (b) | in the case where a borrower or credit receiver or lessee is required to effect regular payments, if the borrower or credit receiver or lessee fails to pay at the end of a period an additional amount of finance charges recoverable from him in terms of subsection (1). |
(Any amount recovered by a moneylender or credit grantor or lessor from a borrower or credit receiver or lessee, as the case may be, before the commencement of the Usury Amendment Act, 1990, and which could be recovered under section 4 of this Act as substituted by subsection (1), shall be deemed to have been recovered under section 4 so substituted.)
