Money lenders see surge in clients after festive season

WHILE the festive season is filled with joy and cherished moments with loved ones, it often leaves a trail of financial strain in its wake.

As the holiday cheer fades, many people are left grappling with the consequences of their holiday spending.
The allure of the season can easily blind even the most cautious among us, leading to impulsive purchases that seem harmless at the time but can result in long-term repercussions.

“I thought I could manage the expenses, but I’m now regretting my decisions. The kids had a great time, but now I am left pondering how to get through January. I never thought I would have to resort to borrowing just to pay for basic necessities,” lamented Ms Thando Moyo, a mother of two from Mpopoma.

Her sentiments resonate with countless families who find themselves in a similar predicament.
While the festive season is a time for joy, it can also be a breeding ground for financial anxiety. The pressure to provide a memorable experience for loved ones often leads to overspending and when the bills start rolling in, reality hits hard.

For many, the option of turning to unregistered money lenders becomes a necessity rather than a choice.
These lenders, while often criticised for their high interest rates and predatory practices, offer a lifeline for those in urgent need of cash.

The speed at which they provide funds is a significant draw, especially during a period when traditional banks are bogged down by bureaucratic processes.

“Honestly, I do not have the luxury of time. I need money for my son’s school fees, and the bank’s lengthy procedures are not feasible. I have already borrowed from a local money lender, and while I know I will pay more in the long run, it is my only option,” said Ms Nomsa Khumalo from Mpopoma.

Mr Arnold Sibanda, a Mpopoma money lender, understands the desperation that drives people to his door.

“I see the same faces every year after the holidays. They come in looking stressed, and I know they have spent more than planned. I try to help them, but I also have to protect my business. It’s a delicate balance between offering assistance and ensuring I am not left with bad debts,” said Mr Sibanda.

“First-time clients are charged more than clients we have worked with previously, whether it’s their second or third time. Again, for first-time lenders, I have introduced a new facility of directly paying their school fees instead of giving them cash.

That ensures the money is used for what it is intended for.

“I have a steady stream of people seeking to borrow over a thousand in hard currency at any time. We do not work with strangers; each newcomer must be introduced by someone within our network, such as an existing or past client,” he said.
However, there is no harm in borrowing and investing in a fast cash business to generate money, says Ms Angel Khoza.

“I would not borrow from money lenders for consumptive purposes. Instead, I would only borrow to boost my business so that I generate money. However, I do not discourage people from dealing with money lenders.”

As the New Year approaches, the cycle of borrowing and repayment begins anew.
It is often said that loan sharks create an environment of fear, intimidation, and control for their victims, and they use almost any means to tempt people into taking out a loan from them.

They know how to spot people who are vulnerable and need money. This creates a vicious cycle of debt for those unable to pay back their loans and often leads to serious financial issues, such as families losing their homes or being pushed into extreme poverty because they do not have enough money to survive, says financial advisor Mr Sipho Ndlovu.

“People need to realise that borrowing from illegal money lenders should be a last resort. Budgeting and planning for the festive season can make a world of difference. It’s easy to get caught up in the moment, but being mindful of one’s finances is crucial,” warns Mr Ndlovu.

As the celebrations give way to the realities of daily life, the lessons learned during this festive season should serve as a reminder for the next, he added.