Friday 14 October 2005

How can we protect ourselves?

Last week’s crazy business plan

Last week we went a little crazy and considered setting up our own loan shark business. We thought we’d begin by operating from our current employer’s office so we would get free tea and biscuits and the occasional promotion for looking busy. We thought we adopt the traditional loan shark approach of charging vicious interest rates, pretending to operate according to the rules set by the Micro Lending Association, taking victim’s ATM cards and PINs, taking as much money from their accounts as we like (because there’s nothing they can do to stop us) and then getting nasty when they can’t or won’t pay us back.

However, after serious reflection we decided that it probably wasn’t such a good idea. Firstly, we feared that sooner or later Government is going to get really nasty towards unscrupulous loan sharks and start passing laws that would make our activities illegal. Much as we’d like to make loads of money we’d prefer not to do so from a prison cell.

Secondly, we had a crisis of morality. Isn’t it, well, morally wrong to rip off the financially unfortunate? Isn’t it also likely that the people we want exploit will one day turn against us and throw us money-lenders out of the temple? Perhaps if we have a conscience we shouldn’t really go into the lending business?

All of this was prompted by the various investigations we’ve undertaken in the past which showed loan sharks operating from beneath trees in car parks and others from their government offices. We found loan sharks who claim to have letters from banks authorising them to take ATM cards from their customers. When we told the banks about this they were furious as it’s a complete lie. No such letters have ever existed and never will.

We’re back on the straight and narrow

Instead we’re going to go back to our original aim. To see how we can protect consumers from the people we almost became.

So what’s the solution? What can consumers do to protect themselves? What protection can we seek from others? Who’s there to look after us?

We think that much of the answer is staring us in the face. Well, the message is in our pocket or purse. Look at a P5 coin. What does it say?


We need to rely on ourselves. Read Dichaba Molobe’s column in this paper. He writes a great deal of good sense about self-reliance and the “entitlement mentality” we sometimes show. As we have said before our parents were right. There comes a time when we have to take responsibility for our own actions, particularly when it comes to money.

Don’t we all know by now that loans from loan sharks are hugely expensive? Even if we aren’t so good at the maths surely we can tell that they’re ripping us off? Surely we know that giving our ATM card and PIN to a total stranger who has a financial hold over us is, well, silly?

The bad news is that we really can’t expect Government, the banks and society in general to take the blame when we get ourselves into desperate financial problems because we’ve taken a wrong turn financially and sold our soul to the financial devil.

Some tips on taking personal responsibility

This is perhaps insultingly obvious but before you do anything you know to be unwise ask for advice!

We all have people around us that we can turn to for advice. There’s usually a family member or friend we can trust who is not only wise but can do maths as well and can look at what we plan to do. If you don’t have someone like that then go to your kid’s school. Take the Maths teacher an apple and ask his or her advice.

Go to your Church. Someone there will help you think through your options. Mention something about moneylenders and temples!

Please, please, please, before you borrow money to pay off other debts, first talk to the people to whom you already owe money. Whether it’s your landlord, your bank or a utility company the chances are that they would much rather do a deal with you than waste loads of money taking legal action against you. Isn’t it better to restructure your existing debts before getting into even more debt?

Talk to your employer. Many employers will advance you some salary that you can then pay off gradually, often without any interest at all. Yes, it might be embarrassing but surely it’s better than going to a loan shark? At least your employer is obliged by law to treat you reasonably and not to rip you off.

What can Government do?

Despite us urging ipelegeng we do think that there is an obligation on Government to set the scene and to set certain limits on what’s acceptable.

We think Government should pass laws that control the micro-lending industry. We think there should be some limits on how micro-lenders can operate. Despite the good work of the Micro Lending Association we think there should be controls that have real force. Real force that’s backed up by the fear of closure, financial penalties and prosecution.

They simply shouldn’t be permitted to lend too much, at outrageous interest rates and without proper registration and inspection. Food inspectors can just walk into a restaurant and inspect the premises for cleanliness, hygiene and good practice. It should be the same with micro-lenders.

The lesson

Ipelegeng. You know it makes sense!

This week’s stars!

  • Titus at Pick N Pay at Molapo Crossing for going the extra mile and being helpful
  • The Police for responding to a letter of praise by publishing the letter in the Police magazine as an inspiration to other officers. The officers were Senior Superintendent Gondo from Police HQ and Assistant Superintendent Fane and Sergeant Kerekang both from Borakanelo Police Station in Gaborone.

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