Loan sharks are smiling amid the financial squeeze

There is an old saying that, “He who goes a-borrowing goes a-sorrowing”. One of America’s founding fathers Benjamin Franklin writes in his 18th Century publication, about the genteel forced to borrow from those they formerly despised and speaks of a ploughman who can stand on his legs being higher than a gentleman on his knees. A wise friend once tried and succeeded in stopping me from taking a business loan. He said I was better off saving and using my own money. 

In a state where the capital I wanted seemed terribly hard to come by, I didn’t understand initially, thinking of course that he was just being mean and refusing to lend me money. Those words have returned to me from time to time when I contemplated a loan for one thing or other. In some cases, of course I succumbed and took the loan anyway. There are many loans, however, I could have taken over the years that I haven’t.

Borrowing at different levels is inevitable. As a country, there are things we might never be able to accomplish without borrowing but that borrowing often comes with nasty strings that have left some bruises. What that old cautionary quote on borrowing is telling us is that the appetite for borrowing needs to be regulated, something that is getting harder to do in these hard economic times. 

As singer Ronald Mayinja aptly put it, “tuli Ku bunkenke,” (we are all on the cliff’s edge). After the hard hitting lockdowns, businesses need a shot in the arm, the price of fuel is sky high, soap is pricey, children must go to school, kameeza money must be found and our earnings rarely add up. No wonder many civil servants are striking. 
Results of a Bank of Uganda financial capability survey published this month indicated that only one percent of working Ugandans earn above Shs1m per month. That is a very small fraction indeed and while those lucky few may be looked upon with envy, things are not rosy in that category either. 

I hesitated to explain to a friend who brought up the survey, that with all other factors remaining constant, the people earning above Shs1m could be seen as well-off or even “wealthy” but they were not in reality. Given that this is probably a landless lot, renting houses in the city, partaking of highly priced commodities, paying through the nose for transport because they chose to live in some distant suburb where houses were cheaper and footing the school bills for their children or dependents, Shs1m doesn’t last very long when it is put to the test in the Ugandan context. 

This is how we enter what has been referred to as the mud puddle of need in which most loan sharks lie in wait, to provide seeming relief when the money equation appears impossible to balance. Of course in the grand scheme of things, the loans that keep us awake at night seem very tiny indeed in comparison to the stories of million dollar borrowing. All of us, the small and the big fish are caught up in the big pool or call it a cycle of need. 

As we tighten our belts to weather the current economic storm, it is deceptive to look at the surface of things and imagine that mere cutting back, eating cassava or “kukekereza” is what is doing the trick to keep us afloat. Those earning Shs150,000 a month are looking up at those who earn Shs1m as the wealthy ones, yet the next lot are dodging loan sharks and having sleepless nights. We are all on edge. Tuli Ku bunkenke!
Ms Nampewo is a writer, editor and communications consultant     
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