In Nigeria today, a certain percentage of people depend on loans to make a living, escape from debts, or to fund a project, to pay dues, rent etc. It is not new that there is a ill mindset that is attached to taking loans either from banks or from micro finance companies, but the question is, is it the same for everyone?
After a close and deep research, it is agreeable and safe to say that most people that have problems with paying back the loan are people who are less privileged financially, in other words, they are people who take loans to either pay a debt, fund a little business that will bring little profit thereby it causes the beginning of a never ending cycle.
This is arguable if we consider the fact that wealthy people also take loans from banks but we don't hear that they are being taken to the court or they are being chased around the neighbourhood with police men because they have failed to pay back. This is a long shot though, but it's what we hear and see in our area everyday. We hear cases of microfinance bank's security officials locking people in toilets because they have failed to pay back the amount that they agreed on with the company, or cases where they are paraded in the street while they beg for money from people. My point is that we do not hear this from people who take huge loans, why is that? let us discuss few points below;
Why people have difficulty paying back loans
1. Some folks have turned loans into their daily life even when they don't have a major project to spend on. It has now become a circle that never ends in their life. They can't do without taking out a loan every month. It has become a lifestyle for them and they are used to the rolling-over of debts. They ask for a loan anytime they have a small challenge without checking the consequences very well.
These set of people are the ones that would take a loan because they have a funeral coming their way, or because of a family function they want to attend and participate in.
It is not wise to take loans because of a ceremony. A reasonable person would not do that, as a matter of fact, loans should be taken only to finance a project that will in turn bring in profit for you, but it is surprising that people will take loan to grace a funeral, but they that the people who have come to eat will not help them to repay the loan.
2. Not everyone takes loans to settle unreasonable deals, there are people who take loans, throw it all into a potential business but unfortunately, it turns out that some mishap occurs and everything goes down the drain. In this case, it is a two way thing; one is that the person might have dabbled into the wrong business that caused everything to go west, or there was no adequate planning before starting the business. This is rather an unfortunate case that can befall anyone regardless of whatever reasons.
3. Some folks make the mistake of taking loans to start a new business. It should not be so at all, because you do not know about the business at all, neither do you know what the outcome will be because it is a business you haven't tried before; there is high advantage that the business will crash in which case the loan you have taken will crash along, throwing such individual into a long term debt.
These are some of the reasons why people who take loans never seem to be out of paying debt. Do you think it is advisable or not?