Let’s settle our debts
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.
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Morris Mpala is the managing director of MoB Capital, a thriving Bulawayo-headquartered microfinance institution with a footprint across the country.