Namibians love debt. We eat, drink, drive and wear debt. Like the proverbial pig in the mud, we love wallowing in it. And the clothing shops love giving it to us. It is their cash cow. The furniture shops sing hosanna when they see us walking through the door. “How would you pay for that, sir? We have easy installments and you don’t need to pay a deposit.”
And everything is fine, you have your shiny new appliance that you rarely use, wear your nice new overpriced designer clothes to impress the right people and drive your nice new car. Well, you can afford it. Until payday comes and you realize that you can’t afford to pay for all the things you took.
Before you know it, you are running away from any knock on your door, refusing to answer your phone because it could be Markhams calling and skulking around cyberspace at midnight on payday, frantically trying to transfer your money to a different account. Then your name is somehow blacklisted (not your fault, of course), and suddenly you are a pariah on the credit scene. Sounds familiar?
Most of you probably know someone who knows someone in that position. When the door to “official credit” slams shut, not so legal “cash loans” come in. With interest rates that can reach 2000%, they are a place of last resort for the credit outcasts.
As long as you can prove that you have a regular salary and are willing to leave your ATM card (with the pin) and your ID, you can get help from the goodhearted Shylocks who have filled a niche that exploits our love for debt. They haven’t reached mafia like status yet, but things can get hairy if your account is empty at the end of the month. And until you can redeem yourself in the eyes of the credit bureau, you are stuck with paying whatever rates the cash loan owners charge you.
Unless you are one of the people who have a bent for self-flagellation, there is no reason why you should go through all that. Live within your means. Buy things that you need, instead of trying to fit in with the current fashion.
Whenever you can, buy things with cash, instead of falling for marketing gimmicks. Buying on hire purchase is not cheaper, whatever the smiling (although those are rare in Namibia) sales attendant may tell you. If you cannot afford it, don’t buy it. Try to buy products late, rather than when they come on the market. Early adopters pay a premium and for electronics, have to contend with software bugs. If you must buy something on credit, pay it off as soon as you can. That way you end up paying a little less.
Debt is a heavy weight to carry, never get under it unless absolutely necessary. Practice prudence, and your family will prosper. Do not rush around on month end singing the payday blues, because you bit off more than you could chew.
Michael Munika is the Head of Industrial Relations for NANLO based in Walvis Bay.