"If the whole world is indebted, then who is the anonymous creditor?"
A common challenge that many people face is being burdened by debt. It traps you in a cycle of working solely to pay off loans and accumulated interest, and in the end, you are enslaved. The debt trap starts unconsciously and subtly. Small initial loans are irresistible, more so if you want to use them to take care of necessities. With time, they snowball into a vicious cycle of larger debt burdens. This drive is typically motivated by the pursuit of material and tangible acquisitions, which, unfortunately, in certain instances, has led to severe repercussions, including loss of life, rather than fostering happiness and comfort.
I came across a story in a local tabloid, or maybe I heard it from someone, about a high-profile individual who amassed significant debt in his lifetime. Allegedly, one day, he chose to put an end to his financial woes by taking his own life. It remains unclear whether auctioneers seized his property after his demise or if they followed protocol to reclaim the outstanding debt owed to the creditor. Additionally, considering that credit from financial institutions is typically insured, upon an individual's demise, the outstanding advance is usually recovered from the insurance company.
An acquaintance recently confided in me that he was in trouble with some debt collectors and needed some money to pay them off. I sympathized with him, but I had to be honest and tell him the truth. I did convey that I was facing a similar problem myself and had no extra cash to spare.
In retrospect, I realize I neglected to attend financial literacy classes. Tantamount to the thought, "I won't be here long, so why bother?" While I initially assumed they wouldn't be directly relevant to my situation, I now recognize the valuable insights and skills they can provide for making informed budgetary decisions.
There are enough stories about this issue. My story goes like this.
There is a way you tend to discuss your financial status with your inner circle of friends. Well, I could get up to 200,000 from the various mobile apps I use. And even though that might not be substantial for those who have ten times that amount as their credit card limit, it meant a lot to me. You use it as a way to show off. Just to let your friends know that, hey, "Niko na pesa kushinda babako, kaskie vibaya huko kwenu." The bots translated it to, "I've got more money than your dad, sorry for your troubles." You do so in a subtle way because you know the kind of friends you have and the social circles you belong to.
The notion that money is the root cause of all evil isn't unfounded. Before you know it, you begin lending to acquaintances, starting with one friend. You take loans from digital loan apps at the standard interest rate, but you tack on a convenience fee for yourself, considering you are the one facilitating the loan. It turns lucrative, you extend more loans. Meanwhile, you neglect to save any of the funds for unforeseen circumstances. Soon you are caught up in a debt spiral that you can't escape. You find yourself ensnared in the web of debt as well.
As more friends learn about your lending activities, they approach you for loans, knowing you can easily get a facility from the digital loan apps. You are more of a middleman. Capitalizing on this platform, you've transformed into a lender. Experiencing success with one loan recovery fuels your belief that you can gradually scale this venture and achieve passive income. While others toil, you find the funds coming your way effortlessly, akin to receiving a reward on a silver platter. It comes with risks, as you're well aware. However, you convey the crucial terms of the agreement even without a signed contract, relying on trust that the borrowed amount will be repaid.
Early on, you yield favorable results and become buoyant. You extend loans up to 100,000 and occasionally invest your salary because your borrowers are consistently repaying them. Everything is progressing smoothly, and within months, you experience a staggered income flow that varies with your loan cycles. In certain instances, you don't even need to settle with the loan app; a simple request prompts your borrower to repay and take out another loan. This is another red flag because you are bypassing your agreed-upon terms.
A significant number of individuals find themselves ineligible for loans due to their creditworthiness, and that's where you see an opportunity. Armed with a background in finance, you understand the crucial role credit scores play. If you have a clean record, you can borrow more money without any hassle, as credit reference bureaus cannot identify you as a defaulter. Exploiting this situation, you take advantage of your favorable credit standing to secure additional loans from other lenders.
You discover you can leverage your strong credit history by borrowing responsibly and repaying loans on time, which unlocks access to larger loans progressively. Prompt payment becomes your priority. Whenever you extend a loan to someone, you diligently track their payday and consistently remind them to settle the debt once their salary is received. This approach becomes instrumental in effectively managing and clearing your debts with digital lenders.
Unfortunately, the COVID-19 pandemic impacted many people's ability to work and repay loans. A couple of your clients end up affected. Some got better jobs elsewhere, and some just quit—the ones who had a brick-and-mortar mentality. This caused disruptions with digital loan providers due to missed payments. Then the incessant bloodcurdling calls from these Shylocks started streaming in, like a poisonous inspiration, prompting you to devise a strategy to deter them. Meme lords even recreated a joke about these agents. You start making token payments of 1–10 shillings and would then request that they verify if you have settled the debt. This approach helped create a temporary buffer against the persistent calls. What sticks in your mind quite clearly is you paid 1 shilling against a backdrop of a 50k loan.
Yap, that's the situation you find yourself in. Despite meticulous due diligence, falling prey to scams is a stark reality. It becomes even more disheartening when the perpetrators are individuals you had placed trust in. Yet, even the most reputable financial institutions aren't immune to the craftiness of con artists. They package themselves adeptly to leave no room for doubt and create a false sense of trust, only to vanish unexpectedly. The aftermath involves substantial losses with no trace. You are thus left to shoulder that burden. This underscores the challenge of distinguishing genuine intentions from fraudulent ones when dealing with people. Even the most careful assessments can sometimes be deceived.
Indeed, the allure of money is nearly universal. We enjoy flaunting it. Surprisingly, even those with higher incomes often find themselves entangled in a web of debt and frustration. Despite the abundance of financial coaches, a significant number of individuals still live beyond their means, a trend likely to endure. The belief that more money leads to a better life remains pervasive, prompting people to seek loans even when faced with challenges in repayment.
The experience has taught you that money remains the most influential medium in people's interactions. Despite some individuals refusing to repay, the constant requests for money persist. However, due to those past challenges, you decide to close down your informal lending business. Henceforth, you diligently work on servicing the debt, but at your own pace and terms. Recognizing that life must continue, you taken a more measured approach to financial dealings, prioritizing your well-being and stability. Kwani!
Hasta La Vista, Baby.
