Mi­crofins to miss out on back to school loans

Zambian Business Times - - FINANCIAL MARKETS -

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.

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