Deliver us from ourselves Mr Shiimi
The greatest sin a man can ever make is to try and live beyond his means. This is simply because he will be trying to dig his own grave by creating a dependency on borrowing. Even worse the debts will balloon to proportional levels where the very same man can find it difficult to extricate himself from his problems.
This week the Bank of Namibia (BoN) confirmed shocking statistics showing how much Namibians are riding on a borrowing train in a bid to keep up with the luxury.
Ironically according to the Bank of Namibia the bulk of the borrowing is done to finance luxurious commodities like cars. Perhaps the only important thing that many of our country men miss is that a car is not necessarily a good investment especially if you cannot service the debt that comes with it.
To add insult to injury confirmations are also that 10% of all cars acquired through commercial bank granted loans end up being repossessed and eventually sold to the next bidder available.
This is a worrisome situation and sooner than later BoN Governor Ipumbu Shiimi needs to put the brakes on this gravy train by adjusting interest rates. Perhaps the reason why everyone is being caught up in this borrowing trend is because the cost of doing so(borrowing) is cheap in the country. It obviously means that there is a lot liquidity access and certainly borrowing is coming at a cheaper rate.
In fact last week he confirmed that N$6.2billion of instalment credit extended to households in the last financial year went to the purchasing of vehicles alone and that amount constituted 12% of the N$171 billion of the current instalment credit.
He also told The Villager that “The household instalment credit which is 12% of the current instalment credit is growing way above the country’s Gross Domestic Product (GDP) growth. Although it has stabilised in 2014, it is still unsustainable,” Shiimi said.
If many Namibians were borrowing to finance acquisition of their houses, then one would feel proud of the bulk of them because they are creating a solid foundation for the future generation. Borrowing to buy cars is certainly not a good way of flaunting your wealth if ever it is there.
Perhaps while the Governor has done tremendously well in raising the red flag over high levels of borrowing, one should also understand that the same man has the keys to stop this borrowing train.
It is entirely up to you Mr Shiimi to put the brakes on this gravy train. Perhaps what many miss is that borrowing to finance luxuries does not affect economic growth as than money could be used to generate income and create jobs. We need to see people borrowing to find capital for their projects or their small scale operations which allows the economy to grow not to quench the appetite of an unsustainable borrowing lifestyle.
It also becomes a bit of a humiliation to see the car you have been working for being taken away from you by the banks who supposedly gave it to you. Indeed this is the nurture of banks they will never dstop you from borrowing because its part of their money making plan but at the same time do not expect them to smile with you when you cannot pay back their dues.
They will come after that car and when they do they will send it to the action for a ridiculously small fee and leave you bleeding with anger. Be warned.