By Rumbidzai Zijena
Illegal money lenders otherwise known as loan sharks have become prominent throughout Zimbabwe, “We accept laptops, phones, televisions, fridges, cars e.t.c as collateral for small quick cash loans is the advertisement that
they send out using flyers and social media.
As the ‘January disease’ takes its toll on many Zimbabweans, school fees, uniforms, not to mention grocery in the home. Desperation eventually leads them to find alternative means of getting quick cash as they had
overrun their budgets during the festive season and they find themselves calling the number on advertisements like these as a last resort.
With banks reluctant to lend money to individuals with little collateral, especially on short notice, money lenders in contrast take even small gadgets like cellphones and tablets with less hustle and procedures; they do not adhere to legal bounds resulting in many people resorting to their services to access cash to cover expenses in the notorious
month of January.
However, these money lending agencies are ‘ripping off” people. Their methods of giving out cash are unorthodox but people never consider the repercussions until their asset has been taken.
They are said to demand steep penalties for cash and their ratio of weighing worth of an asset is exorbitant. A man who identified himself as Mr Providence said, “They took my fridge and stove and gave him a loan half their worth. They do not charge interest by calculating percentage. If you default payment they take your things. The amount they give you is the amount they want back, no payment arrangements no nothing”.
A question can be raised to whether these loan sharks are setting an obvious trap for innocent prey, as they know in most cases people will default on payments and they will gain 200 percent profit from their loss which ultimately amounts to daylight robbery.
Lack of ethics in the conduct of these businesses raises other questions speculating on the kind of economy these loan sharks are operating in and what has pushed them to become viciously money hungry to the extent of ripping people off. “Loan sharks are mushrooming in the locations of Harare. The reason for their birth is the current economic meltdown.
They impact negatively on the peoples finances heavily. Imagine you getting a 100dollar loan for a month and returning 150 dollars. In other cases you are asked to leave collateral worth thousands more than the amount.
“In case you delay on payment or fail due to other circumstances they take the whole lot. They are socially unfriendly in case you fail to pay they add interest daily and you end up being harassed or followed to your home. They are bogus in their operations, not registered, and use cruel means to recover their money”. said Mr Ityai Chitoro, a victim of moneylenders.
A ZRP officer, who refused to be named when, asked about the situation said, “We are working diligently to find and arrest these criminals who are conducting illegal business transactions. We have acquired quite a number of leads from their flyers and victims who come forward and we are working tirelessly to bring them to justice”.
Economist Davison Gomo commented on the issue saying, “Government must descend on them and shut them down. These illegal businesses may be criminal syndicates practicing money laundering as a front. Their illegal activities drain the economy thus the Reserve Bank of Zimbabwe together with the police take serious action in identifying and shutting them down”.
But the Reserve Bank of Zimbabwe was unnecessarily unhelpful when questions about what they are doing to curb illegal money lenders were put to them. Alson Mfiri who is the Spokesperson at the Central Bank said he needed clearance from higher office to disclose the list of registered money lenders in the country.
It is these bureaucratic tendencies from the Central Bank that make innocent citizens more vulnerable to unscrupulous money lenders due to lack of information. While the Central Bank sleeps on duty many Zimbabweans are being ripped off as the liquidity crunch bites.