Economic and legal aspects of usurious contracts

The ability to secure financing is essential in light of economic decision-making. However, when traditional sources of financing are out of reach, individuals often opt for alternative methods. Among them, usurious contracts stand out, which are characterized by extremely unfavorable conditions for the debtor, including unreasonably high interest rates and other forms of economic exploitation. The aim of the paper is to research and analyze the phenomenon of usury contracts from economic and legal aspects, with a focus on judicial practice and legislative solutions in the countries of the Western Balkans. The conditions under which the contract can be characterized as usury, its legal validity, the possibility of annulment, and the consequences arising from it are analyzed. Special attention is paid to the challenges in recognizing and sanctioning such contracts, bearing in mind the fact that they often occur on the border of legality. Special attention is paid to the assessment of the effectiveness of the existing debtor protection mechanisms and to the identification of opportunities for improvement of the regulation. Analyzing the legal systems of different countries creates a basis for formulating recommendations that can contribute to strengthening legal certainty and a more effective fight against usury.