Microfins to miss out on back to school loans

JANUARY for an average and middle class Zambian comes with its own challenges. Its defined as the autopsy of the festive season characterized by high spend at both Christmas and New year. The retail sector, mostly supermarkets with shopping malls now dotted across the country had all sorts of price cut promotions that enticed most Zambians to spend much more than was budgeted for.

Moreover, the Christmas and new year period was spent on holidays with family members and the temptation to spoil oneself and those close to someone was rife. Hence the January to February period leaves most people with a financing deficit or gab. And that is where micro finance and even banks tend to maximize on payday loans.

This year will definitely be different, the year has started with a Cholera outbreak that has seen the government Ministry of health and the joint working group established to combat the outbreak suspend the scheduled opening of schools and colleges across the country. This is an important measure that will not only lessen the expected movement across the country as children and students would have had to travel to various schools across the country, posing a greater risk of further inadvertently spreading the dangerous Cholera outbreaks.

This measure has already thrown already prepared and paid for radio programs and advertisements for back to school loans. Moreover, even those Zambians without back to school wards to sponsor had financing gaps created by either spending beyond budget during the festive period or having taken a binge holiday beyond the savings available.

Most of the above situations will now not be urgent as the review date for the opening of schools has been set for month end 30 January 2018. By this date, the January pay day would have come and that’s a missed payment for a loan by the financial services sector. Moreover, some of the parents with financing deficits would be fully recovered after the month end.

So how about the parents and guardians and all the Zambians that would have had no option but to take up these back to school loan? this extension of School opening date will manifest as a savings in terms of interest charges and fees that would have been incurred. The will however be extra costs incurred to ensure that the children or wards are kept in the most conducive sanitary conditions. Treatment of water and ensuring extra hygiene measures are put in place for home food preparation.

For the parents and guardians who had been street vending, this measure will minimally reduce the impact, but their loss of revenue and trading places need to be addressed urgently. The ministry of local government put out 22,000 as the total number of self-employed street traders and vendors that are affected just in Lusaka by the banning of street vending due to Cholera outbreak.