Maybe I need to give my background for you to understand better. First, I am originally a biomedical scientist in terms of academic orientation. Money business is not my forte. Ask me about germs and bacteria, and probably why we need to wash our hands frequently. Secondly, I am not well endued with enormous masculinity to motivate me in such endeavors.
But the two initial discounts are not the point of displeasure though. I am deeply concerned about debt management in Kenya setting. A lot of people are good in planning many things that pertains their life, but not so with their debts, it’s a nightmare to many. While we protest that financial inclusion is still in its baby steps, many fellow microfinance practitioners will be of a different opinion. Banking services, particularly credit have percolated into the very interior of this country, which now leads to, how well is this penetration managed.
Back to our case above, Kazungu (not real name), was actually living in his own house in the outskirts of Kenyan’s largest city Nairobi. He had farming interest in adjacent leafy suburb, but was also in commuter transport industry for a number of years. He had however borrowed from a number of institutions in self-capacity, under a legally registered entity and through the wife. The demands on weekly or monthly basis for loan repayment were now a challenge that he could not meet.
This story has however repeated itself over the years. Managing debt is a worldwide problem, sometimes affecting nations. Late July the world was awash with news of Argentina displaying inability to pay back interest on loans. Greece has gone through this. On the positive side, wise business before manage their debt ratio, and are able to honor their obligations promptly. This includes ability to handle emergencies in business, macro and micro environment. This level of prudence involves a number of factors that would be handled on this platform on weekly basis.
On the reverse, where discipline and improper planning exists, a door of poor management of debts arises. Multi-borrowing, diversion of funds, lack of planning are some of the prominent reasons why many individuals end up in sour relationships with their lenders. Of course nobody wants to be in this situation, and much more the challenge is how to get out of it.
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Zak Syengo is the Senior Manager Marketing & Communications at Rafiki Microfinance Bank
