UGANDA: Caution on borrowing from money lenders – VIDEO
I have worked with microfinance institutions but one thing I have noted is that, relatively well-to-do borrowers make up the highest percentage of loan defaulters.
They normally have access to credit and therefore a soft target for money lenders.
The low income earners who find difficulty accessing loans normally pay back their loans and in time.
There are a number of factors that can explain this but it is important that;
1. We borrow money that we can service.
2. When borrowing money, always stake something of equivalent value or relatively higher but most especially property that is not basic. You can use land, car but not residential house if you only have one.
3. When you borrow, it means that you have received and used your income before you earn it. Definitely, the lifestyle has to change; you can’t spend as much, you must revise your budget so as to cater for the new cash outflows.
4. Whenever you can, avoid borrowing from money lenders which are not regulated. You will get the money very fast but they can be very cunning. They can at times make you sign a post dated land sale agreement and they vanish on the date of repayment only to resurface when claiming the property. Borrow from a bank or MDI. If all fails, borrow from a sacco. Where possible borrow from family.
Among other precautions
DENIS WABUYI IS AN ACCOUNTANT —— AUTO – GENERATED; Published (Halifax Canada Time AST) on: May 04, 2018 at 09:42AM