Free your employees from easy loans trap

In Safaricom’s sustainability report released last month, something caught my eye. It disbursed Sh351.2 billion through fuliza in the first six months up to June this year.

The telco did 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 debts considering there are several other formal and informal technology-edged micro-lenders.

These are not statistics. They are the people our economy depends on to provide labour and knowledge and competencies for smooth operations.

The easy-to-get expensive loans are causing havoc to the social fabric and its seismic effect will be felt across all sectors in the fullness of time.

Debt misery leads to increased anxiety and mental disorders that affect every area of an individual’s life.

The emotional strain of dealing with the possibility of being chased by landlord, being auctioned and not being able to fend for one’s family affect not only an individual’s health but the health of the institutions they serve. The health of a firm is as good as the health of its employees.

Debt affects self-esteem, concentration, and creativity rendering employees less productive at work.

Most people who are debt-laden live in denial and suffer silently. For instance, they underestimate how much they owe others, dodge their debtors, and avoid picking their calls, and keep changing vendors.

Despite debt denial, the stress associated with it cannot be wished away. This stress is manifested by such things as lack of sleep, difficulty in concentrating, nagging worry, and low immunity all of which cause the employer and the society heavily.

Another deadly effect of debt strain is anger. People drowning in debts and consistently worrying and angering over their inability to meet their financial obligation project to their employers, the government, and social institutions. They lose morale to work and end up being a liability to their employers.

When hopelessness sets in, self-care and low self-esteem follow in succession and the affected individuals likely get depressed and live only for the day. With this don’t care and defeatist attitude they get into more debts.

With countless mobile lending apps and easy products like fuliza on the palms, a person in the ‘right’ mood can only sink deeper into the addiction of borrowing even things that can wait.

Businesses and other organisations can contribute greatly to the health of their employees by offering basic financial literacy skills and encouraging them to join SACCOs in order to save and borrow cheaply and sustainably whenever they are in financial need.

Mr Kiunga is the author of ‘The Art of Entrepreneurship: Strategies to Succeed in a Competitive Market’