Let’s set­tle our debts

Chronicle (Zimbabwe) - - Business Chronicle - Mor­ris Mpala

FIRST and fore­most let’s deal with the pol­i­tics of the above head­line. The fact that we are a lend­ing com­pany does not mean we have mis­placed pri­or­i­ties on the above. We are also debtors to other par­ties thus we also need to set­tle our debts as well. In ad­di­tion by debts we also in­clude prom­ises and other un­der­tak­ings that in­volve in­tegrity to a third party. So our topic to­day is not about us and think­ing about our bot­tom line but we are look­ing at the grand scheme of things in a holis­tic man­ner from a so­ci­etal eco­nomic per­spec­tive to achieve fi­nan­cial free­dom.

Debts have crip­pled the eco­nomic land­scape and that is not de­bat­able. Prob­a­bly the none set­tling of debts is the prob­lem and it has cre­ated debts over hang to in­di­vid­u­als and com­pa­nies alike. This has led to com­pany clo­sures to the detri­ment of the so­cioe­co­nomic life

When com­pa­nies close the debt over­hang due to the domino ef­fect is just un­be­liev­ably huge.

We need to cul­ti­vate a cul­ture of pay­ing off our debts. Noth­ing is for free. When we owe it’s in our best in­ter­est to set­tle to avoid karma.

The in­ter­twined debts be­tween Gov­ern­ment, util­i­ties, sup­pli­ers, Zimra, in­di­vid­u­als and com­pa­nies are such that if the ma­jor debtor was to pay down the road most debts would be set­tled.

Eco­nomic ac­tors are not set­tling pure debts, prod­ucts sup­plied or ser­vices ren­dered. It is a cul­ture of non-pay­ing which has even af­fected the coun­try as a whole.

The sense of en­ti­tle­ment, freeload­ing and free­bies has reached can­cer­ous lev­els. No one seems to be in a hurry to set­tle obli­ga­tions that were en­tered into with a sober mind.

Debts in gen­eral are not a bad thing. It is the non-servicing of debts that is the big­gest down­fall es­pe­cially for small com­pa­nies. Fi­nance de­layed is fi­nance de­nied.

Many com­pa­nies have folded but hav­ing a huge debtor’s book. Jobs lost with a bal­loon­ing debtor’s book but lack­ing servicing of the said debtors.

The non-set­tling of debts is be­cause there are no con­se­quences for not do­ing so.

If you don’t pay your debts you have noth­ing to lose but ev­ery­thing to gain and that is where the big­gest chal­lenge lies.

No one is afraid of be­ing taken to courts, black­listed or be­ing talked about or even karma. We just need to be afraid of some­thing to have a con­science or ubuntu.

The lack of fear of con­se­quences due to non-ac­tion be­comes a very dan­ger­ous cul­ture.

A na­tion’s cul­ture to­wards debts is a re­flec­tion of its peo­ple. Com­pa­nies’ cul­ture to­wards debts is a re­flec­tion of its em­ployee’s at­ti­tude to­wards debts. Com­mu­ni­ties’ at­ti­tude to­wards set­tling debts tells more about the in­di­vid­u­als in that com­mu­nity. If as in­di­vid­u­als we are not set­tling debts that sim­ply means as busi­ness, com­mu­ni­ties and as a na­tion at large we will not set­tle our re­spec­tive debts as it is can­cer­ous like that.

In­di­vid­u­als make the com­pa­nies, com­mu­ni­ties and a na­tion and thus these en­ti­ties as­sume re­spec­tive in­di­vid­ual per­sons’ traits.

It’s a long wind­ing road to fi­nan­cial free­dom and re­quires a sense of dis­ci­pline and de­cency that needs day to day cul­ti­va­tion.

“Do unto oth­ers as you would like them to do unto you” is a great old wise adage that re­quires lis­ten­ing to.

If we lived by this prin­ci­ple we would have seen that only those in­ef­fi­cient will ac­cu­mu­late debts that are to­tally as a re­sult of their in­ac­tiv­ity.

Why do we have a sys­tem that pun­ishes those that are ef­fi­cient?

A sys­tem that re­wards un­scrupu­lous ma­noeu­vres. A sys­tem that cel­e­brates non-com­pli­ance. A sys­tem that gloats about non-set­tling of obli­ga­tions.

A sys­tem that pe­nalises those that play by the book. Then we com­plain about an eco­nomic melt­down as a coun­try and as a con­ti­nent when it’s of our in­di­vid­ual mak­ing.

It makes eco­nomic ac­tors not set­tle their obli­ga­tions due to lack of con­se­quences.

The start­ing point to set­tling debts could be the net­ting off of debts be­tween in­sti­tu­tions so that we re­main with a net po­si­tion on each bal­ance sheet. Then those in the red do well what they owe.

It’s only fair to ap­por­tion fi­nan­cial blame where it is due.

With the num­ber of counter claims it could go a long way in set­tling all these fi­nan­cial obli­ga­tions. Fi­nan­cial well-be­ing be it in­di­vid­u­als or or­gan­i­sa­tions is cor­re­lated to the amount of debt over­hang.

Debt over­hang has paral­ysed the en­tire sys­tem and has cre­ated a pay­ment grid­lock both phys­i­cally and men­tally.

Can debts be set­tled? Of course if the com­mit­ment to do so is en­cour­aged. It’s a cul­ture thing. Once we un­learn the ten­dency of not to set­tle obli­ga­tions it will be happy days, it goes with­out say­ing.


Mor­ris Mpala is the man­ag­ing di­rec­tor of MoB Cap­i­tal, a thriv­ing Bulawayo-head­quar­tered mi­cro­fi­nance in­sti­tu­tion with a foot­print across the coun­try.

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