Does The $330 Loan Industry Sow The Seed Of Instability?
By J. Yanqui Zaza
Economic Editor
Beginning 2004 to the date of the August 26, 2018 article about BRAC’s $330 loan lent to 27,010 clients, I have come across many petty retailers. I interacted with them at Red-Light in Paynesville, at ELWA Junction in Paynesville; at Caldwell Junction, and on Randall Street in Monrovia, Monsterrado County in 2004, 2013, 2017 and 2018. I bought goods from them in Kakata, Margibi County; Gbarnga, Bong County; and Ganta, Nimba County in 2013 and 2018; I observed them in Zwedru, Grand Geddeh County in 2013, and I talked with a few of them in Zorzor, Lofa County in 2018.
They sell a few merchandises, some in wheelbarrows, some in buckets, and others in hands. Some of the inventory is made out of a few pairs of socks, six to ten T-shirts, a wheelbarrow full of assorted goods. Some sellers run behind moving cars to sell one to two sticks of chewing gums, etc. Was it possible for these petty traders to make profits with a small inventory, my colleagues and I have and continue to wonder? If they are not making profits, are the school age-children using the retail-business to escape the duties of teenagers such as school attendance, for example?
During the 60s and 70s, adolescents, including me sold cornbread, pop-corn, cool-aid, roasted meat, etc. to augment the meager wages of our parents. Nowadays, many of the school-age children have no parent and have to fetch for themselves, I surmise. In fact, UNICEF 2016 Report says “…approximately 62%, or nearly two-thirds, of primary-aged children in Liberia, are out of school.”
However, will our “precious jewels” (i.e., our children) find it difficult to survive or make a living if society does not allow money hustlers to influence them? Shouldn’t our society encourage our traumatized children to enroll in camps and learn skills and moral values? Better yet, why not discuss with profiteers how best to get our school age-children engaged into less-money driven activities?
It is a bad idea to expose children to money and, or worse expose them to profit-making, according to Ms. Brennan Jobs. Ms. Jobs, the daughter of the late co-founder and chairman of Apple, Inc. Ms. Jobs stated that her father frowned on the practice to give money to a child. In her book called “Small Fry,” she narrated that her father “withheld money from her even as his wealth ballooned…all because “…he was teaching her that “…money can corrupt,” according to Ms. Nellie Bowles of the NY Times.
Also, Mr. Paul Piff, a doctoral student in psychology at the University of California, Berkeley, stated, based on his research, that “having more money leads to more aggressive attitude, selfish and morally reprehensive behavior, and usually steals when he/she cannot make ends meet. Even the Holy Bible advises good-loving citizens not to have the love of money, according to Ecclesiastes. Verse 10 of Chapter 5 of Ecclesiastes says “whoever loves money never has enough; whoever loves wealth is never satisfied with their income…” I am not against the advancement of entrepreneurship. Not so. In fact, in 1979, I was employed to serve as one of the extension officers at the Small Business under the Liberian Investment Commission.
The Small Business did not recruit borrowers who were undeveloped, nor did it appropriate insufficient capital and, or demand repayment of the loan within one year. In fact, it did not only interact with potential would-be borrowers but also it assisted them to prepare five-year-feasibility studies (profit/ (loss analysis), assisted them to obtain loans from the World Bank, assisted them to organize their bookkeeping and accounting system, etc.
Okay, profiteers have coerced government to outsource its lending functions to NGOs. But NGOs, BRAC, for example, do not Prepare profit/(loss) to determine if the US $330 is profitable, nor do they assist clients to keep books and records. I am sure that the microfinance industry is ware that insufficient capital does not only generate a loss but also it is the primary reason why small businesses fail, according to Investopedia (most common reasons why small businesses fail). If the industry is aware that insufficient capital is not profitable, why they continue to recruit undeveloped clients? Or better yet, what kind of business practices BRAC and other microfinance are using to get their 27,010 clients to repay the loans since they might not have exchanged collaterals for the loans?
Most importantly, BRAC and other lending institutions do not offer adequate loans to Liberians to invest into lucrative businesses such as diamond, gold, real estate, etc., thereby, excluding them from them lucrative businesses. And, unfortunately, not only are the microfinance clients failing to make profits but also they are discouraging school age-children from preparing themselves to become productive citizens. More so, the money-making culture is now encouraging more school age-children to join the retail-business or seek employment with the diamond industry. Learning skills or joining societal organizations, including religious institutions, is no more the way of life. And unfortunately, our government cannot deter and, or ban school age-children from activities such as microfinance, gold digging, etc., all because it is not a stakeholder or a decision maker.
When society allows money making entities such as BRAC to put money-making ahead of societal interest and, or relax discipline, etc.; chaos or instability becomes inevitable. America is a test case. Before Opioids permeated American white communities, the rich propagated that blacks, etc. were the problems. Guess what, now that Opioids kills 115 persons a day, corporations want government’s involvement to solve the drug epidemic. (https://opioids.thetruth.com/o/home?source=OP_1HFY19_SEARCH_GOOGLEGRANTS_ACQUIRE_SITEACTION_TEXTAD_KNOWMORE).
Attitude is contagious; therefore, Liberia should not repeat America’s delay in fighting the drug epidemic or else it will face the penalties in allowing BRAC to train its youths to love money.