This week I interviewed TransUnion’s CEO Geoff Miller about the fourth quarter Consumer Credit Index (CCI) that was released today. What he said was that the most problematic sectors of the credit industry are low LSMs, personal loans and micro-finance. He said that consumers take out short-term micro loans that are repayable over from two to five years, and don’t realise how much interest they are paying to finance things now.
Like Marcel Proust’s Madeleines, his words in my ear on the other side of the line triggered a memory of a long, long time ago.
I was a little girl with a list. I walked up the cement steps of the green gabled general wares store, and peered over the counter at the lady in a green blouse and fake white pearls around her neck. She, in turn, peered at me over wired rims, took the list from me, and bent down to retrieve a book from underneath the counter. In the book she made a few sums, ticked items on the list, and handed it back to me.
“Vertel jou pa hy moet sy skuld kom betaal, hy het nog net soveel krediet oor.”
I nodded solemnly and wondered if I could get away with some sweets on the book. Problem with books is shit gets written down, and I was already too precocious to allow myself to be caught. I gathered the remaining items on the list, bread, coffee, sugar, flour, yeast, and took it to the counter. As I left the store I could feel her eyes bore into my neck and her head swinging off its axle as she shook it at the hopelessness of my situation.
This was not an isolated event. My father was always in debt. Every Christmas he gave me R500 to buy “things girls need”, and as I got older toys and sweets became jeans and cigarettes.
What I didn’t know or understand at the time was that each year come Christmas micro-loan businesses came to his work and offered him loans, that he would spend the rest of the year and the years after that paying off. But he so badly wanted at least Christmas to be good, that he didn’t consider the exorbitant interest.
He never got ahead of his debt, and when he died his legacy of “do now think later” lingered with the rest of my family.
Wouldn’t it be nice if we had financial common sense lessons at school? I firmly believe that quality education can uplift every single South African. Hey, it worked for me.