Talk is cheap! We get all the theory on how not to get into debt, manage our finances; do not use debt to pay off other debt etc. This is all nice in theory, but that is all it is - something that people with degrees learnt at varsity.
What happens in the real world when at the end of the month we do not have enough to pay our bills? Do we grab the nearest magazine or news paper and read the dos and dont's of lending and borrowing? No! We go into panic mode, knowing that should not pay your rent with credit card money. We do it anyway. So the spiral starts, next month same thing until we are in a hole so deep that we cannot get out of it.
According to the Business Day, household debt reached a record high of 77.4% of disposable income in the third quarter of last year, up from 49.8% in the fourth quarter of 2002. Consumer debt has risen 134% over the past four years to 2007. Car repossessions have risen by up to 20%. Remax has estimated that 17% of people who own houses will lose them this year.
After this come all the phone calls, letters and SMS's. Talk about getting blood out of a stone! As long as that clerk on the end of the phone has made sure he or she reminds you of your situation then he/she has done her job. Being on the receiving end of these calls and letters is no picnic. You go into panic mode, you get depressed and you start fighting with your spouse and children. Business becomes tougher because you are not in the right mind frame to do what you need to do in order to earn money. Friends and relatives leave you; often there is a break up in the marriage. All of these are real live issues that one faces when one is caught in the debt trap. Guess what the banks and creditors do they keep phoning, threatening and assisting in destroying lives. Surely they can by now work out that these tactics are meaningless and futile?
Banks should put their money where their mouth is and start helping people instead of doing everything in their power to get the client in debt. Forget about debt consultants and the like, get your client in and have a chat to him. If he is in his own business then advertise his business on the back of every mail that you send out to your clients that can pay their bills.
Postbank give their advertising space away to their clients - I think that is so admirable and a win-win solution to both the bank and the clients. The bank could also run a magazine where they advertise a number of clients' businesses each month. Sure, it will cost a few Rands (which they can more than afford) and they will gain so much more. This will be way cheaper than all the phone calls, lawyers letters etc.
If the person is employed then assist them by setting them up in a realistic part time business opportunity. All the additional income could go directly to the banks and retail stores to pay off the debt. Once the debt is paid off you continue for 6 months to get the advertising so that you never get into that situation again. See this is a way better solution than the current practice and is in the true spirit of Ubuntu and Masekane.
