Free your employees from the trap of easy loans
- Safaricom completed 787 million transactions during the period, which translates to 300 fuliza loans processed every second.
- The expensive and easy to obtain loans wreak havoc on the social fabric and its seismic effect will be felt in all sectors over time.
- Debt affects self-esteem, focus, and creativity, making employees less productive at work.
In Safaricom’s sustainability report released last month, something caught my eye. He disbursed 351.2 billion shillings via fuliza in the first six months until June of this year.
The telephone company completed 787 million transactions during the period, which translates to 300 Fuliza loans processed every second.
This is just the tip of the iceberg. It shows how ordinary Kenyans are drowning in debt given that there are several other state-of-the-art formal and informal micro-lenders.
These are not statistics. These are the people on whom our economy depends to provide the workforce, knowledge and skills to make it work.
The expensive and easy to obtain loans wreak havoc on the social fabric and its seismic effect will be felt in all sectors over time.
The misery of debt leads to increased anxiety and mental disorders that affect all areas of an individual’s life.
The emotional strain of being sued by the owner, auctioned off and unable to provide for their family affects not only the health of an individual, but also the health of the institutions they serve. The health of a business is as good as that of its employees.
Debt affects self-esteem, focus, and creativity, making employees less productive at work.
Most people in debt live in denial and suffer in silence. For example, they underestimate how much they owe others, dodge their debtors, avoid taking calls, and keep switching providers.
Despite denial of debt, the stress associated with it cannot be ruled out. This stress manifests itself in factors such as lack of sleep, difficulty concentrating, nagging worries and poor immunity, all of which have serious consequences for the employer and society.
Another deadly effect of debt stress is anger. People drown in debt and constantly worry and anger over their inability to meet their financial obligations to their employers, government and social institutions. They lose morale at work and end up being a liability for their employers.
When desperation sets in, self-care and low self-esteem follow one another and those affected likely become depressed and only live for the day. With this indifferent and defeatist attitude, they become more indebted.
With countless mobile loan apps and easy products like fuliza on the palms, a person in the “good” mood can only sink deeper into the addiction to borrow even things that can wait.
Businesses and other organizations can make a significant contribution to the health of their employees by providing basic financial literacy skills and encouraging them to join SACCOs to save and borrow cheaply and sustainably when they have financial needs.
Mr. Kiunga is the author of “The Art of Entrepreneurship: Strategies for Success in a Competitive Market”