The Sunday Mail
Tendai Chara
“And forgive us our debts, as we also have forgiven our debtors,” reads Matthew 6 v 12.
Christianity is the most practised religion in Zimbabwe and most people can recite The Lord’s Prayer, from which the above verse is drawn.
But despite the fact that most people are aware of the need to forgive other people’s debts, it seems that not so many are willing to practise this biblical principle.
Basing on the number of notices that are being issued by the Messenger of Court, it appears more and more people and corporates are sinking in debt.
Both movable goods such as refrigerators, beds and stoves, among others are going under the hammer as companies and individuals seek to recover their money.
On a daily basis, the print media is awash with advertisements announcing the auctioning of properties.
Tough financial times are pushing more people and companies into debt, resulting in debt collection becoming a lucrative business.
Notices appearing in the daily papers have revealed that the debt web is not only affecting the ordinary person. Companies, prominent business people and politicians are among those that have fallen into the debt trap.
In one of the notices, two prominent citizens lost residential and industrial stands after they failed to service the debts they had acquired from two financial institutions.
In a notice that proved that the creditors are desperate to salvage even the smallest amounts of money, seemingly insignificant items as phone receivers, plastic chairs and office desks were up for grabs.
According to the notices, the majority of the people are losing their properties after failing to service their debts with banks.
The Sunday Mail Extra’s investigations has gathered that the majority of the loans would have been acquired for agricultural purposes.
Apart from banks, creditors are also losing their properties to loan sharks and illegal money lenders who charge very high interest rates, often resulting in the creditors failing to clear their debts.
At the Harare Civil Court, cases in which men are applying for downward variations for maintenance are also on the increase, a factor which has been attributed to the current economic challenges that the country is facing.
According to a notice issued by the Messenger of Court, more than 25 Bulawayo residents are set to lose their property worth thousands of dollars through an auction after failing to settle their debts with creditors, one of them being the Bulawayo City Council.
Mr Lewis Muzhara, of LM Auctioneers, said people are losing their properties as a result of ignorance.
“To most of us, it is both a shame and a sad thing to auction properties that could not have been auctioned in the first place. You would find someone losing a house worth $100 000 over a debt of say, $30 000. Some people take loans and then fail to make any effort to repay,” Mr Muzhara said.
According to Mr Muzhara, the properties that are being auctioned now are as a result of loans that were acquired more than five years ago.
“The process leading to people losing their properties is, indeed, very long. The problem with most people is that they do not want to take responsibility of their debts. Instead of approaching the creditors and negotiating for payment plans, most people do not take any action when the losses can be avoided,” added Mr Muzhara.
Economist Mr Brains Muchemwa attributed the increase in the number of individuals and companies that are failing to service their debts to the liquidity crunch.
“The current deflationary environment characterised by tight liquidity and high interest rates has created vicious cycles of debt traps that have driven both corporates and households into unprecedented bankruptcies,” Mr Muchemwa said.
He said the economic challenges will most probably continue.
“Considering the slowdown in broad money supply and the fact that banks are generally bearish in the face of rising non-performing loans, the credit markets are forecast to remain tight in the next two to five years,” Mr Muchemwa said.
Pastor Emmerson Fundira of the Jehovah Sharma Ministries advised families to avoid debt.
“The Bible speaks against accumulating debts.
‘‘We know that debt can have disastrous consequences on people’s lives.
People lose their assets and debts often result in mental stress which can in turn cause divorce. I advise people to live within their means and avoid debts at all costs,” Pastor Fundira said.
He advised people to seriously consider the biblical advice relating to debt. Psalm 37 v 21 reads: “The wicked borrows but does not pay back, but the righteous is generous and gives.”
‘Stay away from borrowing!’
Extra Reporter
A renowned economist has urged both individuals and companies to avoid debt “by all means possible”.
Mr Brains Muchemwa, the managing director of Oxlink Capital, said the economic conditions prevailing in the country are not ideal for borrowing.
He said as a result of the slowdown in broad money supply and non-performing loans, the credit markets are set to remain tight for the next few years.
“It is, therefore, advisable to stay clear from borrowing and in rare cases when one is compelled to, one has to have sufficient assured forecast cash inflows to meet the debt obligations as they fall due.
Added Mr Muchemwa: “The current conditions are not only hitting hard on borrowers, but are equally squeezing capital out of lenders as asset prices have come down significantly and lenders are, in many instances, failing to recover full value on foreclosures.”
The debt web has not only entangled individuals and businesses.
All is not well in the banking sector were banks are struggling to settle their non-performing loans (NPLs). This has resulted in Government setting up the Zimbabwe Asset Management Company (Zamco) which has so far inherited a total of $188 million loans from banks.
Recently, Zimbabwe struck deals with the International Monetary Fund (IMF), World Bank (WB) and African Development Bank (AfDB) to settle its $10 billion debt by April 2016. According to economists, the repayment of the debt will unlock lines of credit.
