Maravi

Workers, loan sharks and micro-lenders

Workers, loan sharks and micro-lenders
By The Post
Fri 13 July 2012, 10:20 CAT

The revelation by Dr John Phiri, the Minister of Education, that over 77,000 public school teachers are shackled in debt they owe micro-finance institutions is frightening.

But they are not the only ones. Most of our working people are in a similar situation. They are in debt not only with so many micro-finance companies but also with banks, shops and other suppliers of all sorts of things.

And come pay day, they are left with nothing, they can hardly buy a bag of mealie-meal. So they have to go back to borrowing. It is not borrowing for investment; it is borrowing for consumption. Everything they have is obtained on credit.

The house they claim to own is on mortgage; the car they drive, there is a loan behind it. Sometimes even the clothes they wear are from borrowings or are purchased on credit from suppliers.

Some of our workers have consumed their salaries 20 to 30 years in advance. And this being the situation, where is their future? What happens to their families if they dropped dead today?

It is good that our Minister of Education sees this as a big problem, a gigantic challenge affecting the plight of our workers and one that demands urgent intervention. But urgent intervention by who?

This is an issue that calls for strong leadership from Dr Phiri and his colleagues in government to reform our whole system of credit and debt in the country.

This problem has not been dealt with properly over the last 20 years. Now is the time to make sure that the interests of the ordinary Zambian workers come first, not last.

For too long, our people have suffered because government policy and laws have favoured business interest above the interests of the working people.
In this country, the poor pay more interest on the little money they borrow than that paid by the rich people. Ours is a financial system that rewards the rich and punishes the poor. It is a system that makes the rich richer and the poor poorer.

Rich people can borrow from banks to start businesses, get loans for houses and cars, get credit cards, buy clothes, shoes, everything on credit and pay back from their earnings at rates they can afford. Poor people struggle to get meaningful loans from banks; they must use the money for food, school fees, transport and for emergencies like funerals.

They have to borrow from the so-called micro-lenders, the loan sharks who charge the most interests. It is not unusual for these micro-lenders to charge up to over 40 per cent or even over 60 per cent interest on small loans to poor people, workers and pensioners.
This is not in order. This is wrong.

This is shameful. This is exploitation of the workers and the poor. It is time for change. This exploitation must end.
We should not accept a system where loan sharks masquerading as responsible micro-lenders or banks steal what little our workers and the poor have in high interest charges.

The government needs to move in and set some limits on interest charges to the poor and bring it to the same level as the interest that the rich pay. This situation demands that the government acts quickly to deal with this issue. And we call on the working people, the people most exploited by loan sharks, micro-lenders and banks, to demand their own redemption.

There is need to transform our financial sector so that it meets the needs of all our people.

Transformation of important sectors of our economy is of just as much interest and importance to all workers, the users or buyers of goods and services as to the banks, the providers or suppliers of goods and services or the regulators, the government and its agencies. This is something that some in the financial sector seem to have difficulty learning.

And the trade unions need to come in. They are answerable to the workers whose interests they represent. It is therefore right to call upon the workers as a whole, and organised workers in particular, to strengthen their formations, flex their muscles.

There is need for our trade unions, our labour movement to get more involved in economic issues and policies affecting our country's economic growth and development. Workers must control their financial resources, including pension. It is time that the unilateral control and investment decision over workers' funds by the financial institutions was challenged.

A united working class must break the seemingly arrogant culture of entitlement by business to want to use workers' monies as it deems fit. And this must be located within the broader goal of deepening workers' unity in our country, and earnestly work towards the goal of returning to one country, one trade union federation.

There is increasingly more that unites the working class than divides it, including the common challenge of unemployment, retrenchments, poverty. It is only a united working class that is the social force best capable of taking our country out of a current crisis of unemployment and poverty, and lead our society towards a better life for all.

In order for this government of Michael Sata and the PF to address and effectively respond to the electoral mandate of the workers and the poor, as well as the challenge of joblessness and poverty, it is absolutely critical that they place workers' interests at the centre of transformation of our society.

In this respect, concerted effort is required if the PF government is to address poverty and joblessness. We cannot address unemployment in our country unless it is from a consistently workers' perspective and from the standpoint of its political interests.

Any approach to this problem outside the worker and the poor's perspective will not succeed.
In the light of the current high unemployment levels, one cannot fail to admit that private capital in this country has not played a meaningful role in the overall economic development of our country.

As a country, we have made more progress in those areas where government and the donors have taken a lead. Where matters have been left to the private sector, to international private capital, we have seen retrenchments and low job creation.

Therefore, there is need for the government to take a keen interest and play an active role in ensuring that all sectors of our economy are making progress and are doing so without leaving the workers and the poor behind.

Of course, we know that private capital, especially the foreign one, doesn't care about people's needs but solely about their profits! And as for our labour movement, it is important for it to realise that these are matters that should not be left to the government alone - they have an important role to play.

Labels: DEBT, JOHN PHIRI, MICRO-FINANCE, MILES SAMPA, TEACHERS

posted by MrK @ 2:27 PM