Rolled into work this morning, and everyone was in motion. Too many clients in arrears, too much money owed: the start of the month is always bad for this. Only one thing to do - a confiscation team was formed. They offered to leave me at the office, I didn't need to get involved. But what kind of hypocrite would that make me, hanging back from the harder side of the business? I'd never gone on one before, and it's my responsibility to see every side if down the line I'm going to be the one sending these teams out. Besides, the lorry is taken on confiscations, to take away the goods, and it has only three seats. Fortunately I have my big 4x4 so the other loan officers don't have to crouch in the back of the lorry for a couple of hours. So I tell them that I'm coming, and we pile in my car.
Six of us in my car, three in the lorry. The loan officer I'm attached to in the second branch sits in the front with me, a quiet and competent guy. He was once in the seminary, until he decided that a priest's life wasn't for him; now he plans to do a masters in finance. Cue Christ-Antichrist jokes. He brought some music along as per my request. The full car jolts along the rough dirt road at the rural edge of Dar, past banana trees and chickens, and the speakers blare out Karma Chameleon. I'm becoming used to surreality here. Everyone's talking and laughing, telling me that for appearances I'm the boss today - the foreigner come in to manage the move against delinquent clients. I'm a little apprehensive about what we face.
Confiscation is the final stage when a client refuses to pay, and is used as a last resort. All loans are secured by collateral at 150% of the loan, and if payment isn't forthcoming the collateral must be seized. Unlike a financial institution in the West, there's no division of labour into lenders and bailiffs - a loan officer is responsible for all parts of the cycle, including recovery. It's part of incentivising good lending practices, as a client that won't pay makes the loan officer miss targets and lose bonuses, so he or she doesn't want to lend to anyone who won't be able to afford repayments. That is how we can lend to poor people that most banks won't touch, and at interest rates much lower than they could receive from local lenders or the equivalent services (cash converters, pay day loans etc) that the poor in the west resort to, while remaining solvent as an institution. But to keep on doing it, the system has to function by pursuing those who won't pay. That's what sends us rattling down the road, to the door of client number one.
We stand around, knocking for a few minutes. The neighbour says that the client's in, but evidently they don't want to open up. With no way of gaining entry we eventually move on, the message hopefully sent out. Client number two's business (a tailor) is locked up, and we go to his home next. Chickens dart around, children sit and shyly smile. The scent of animal faeces. This house seems quite poor I note, not the best thing for rationalising... But he isn't there either. Perhaps he got word we were coming and departed. Two no-shows threaten to turn this mission into a farce, with just one more client to visit. I haven't had any breakfast, so it's with some relief that I'm directed to a cafe by the road, a good-sized place serving my favourite banana-based meat soup mtori.
As we sit down, I learn this is client number three. A textbook negligent client, he owes less than ten pounds on his last repayment, and has more than a hundred in hand - seemingly he didn't pay through lack of willingness rather than lack of finances. At any rate the nine of us spend more than half that on breakfast, and he does indeed cough up the money. Three attempted confiscations: two no-shows and one repayment. An easy ride of it, and I'm glad I didn't have to see anything worse. We drive back to Dar, Christmas songs about snow and mistletoe forming an unlikely accompliment to dusty roads and brightly-coloured buses, though the ever-pervasive heat is dampened by some seasonal rain. Ho ho ho.
Six of us in my car, three in the lorry. The loan officer I'm attached to in the second branch sits in the front with me, a quiet and competent guy. He was once in the seminary, until he decided that a priest's life wasn't for him; now he plans to do a masters in finance. Cue Christ-Antichrist jokes. He brought some music along as per my request. The full car jolts along the rough dirt road at the rural edge of Dar, past banana trees and chickens, and the speakers blare out Karma Chameleon. I'm becoming used to surreality here. Everyone's talking and laughing, telling me that for appearances I'm the boss today - the foreigner come in to manage the move against delinquent clients. I'm a little apprehensive about what we face.
Confiscation is the final stage when a client refuses to pay, and is used as a last resort. All loans are secured by collateral at 150% of the loan, and if payment isn't forthcoming the collateral must be seized. Unlike a financial institution in the West, there's no division of labour into lenders and bailiffs - a loan officer is responsible for all parts of the cycle, including recovery. It's part of incentivising good lending practices, as a client that won't pay makes the loan officer miss targets and lose bonuses, so he or she doesn't want to lend to anyone who won't be able to afford repayments. That is how we can lend to poor people that most banks won't touch, and at interest rates much lower than they could receive from local lenders or the equivalent services (cash converters, pay day loans etc) that the poor in the west resort to, while remaining solvent as an institution. But to keep on doing it, the system has to function by pursuing those who won't pay. That's what sends us rattling down the road, to the door of client number one.
We stand around, knocking for a few minutes. The neighbour says that the client's in, but evidently they don't want to open up. With no way of gaining entry we eventually move on, the message hopefully sent out. Client number two's business (a tailor) is locked up, and we go to his home next. Chickens dart around, children sit and shyly smile. The scent of animal faeces. This house seems quite poor I note, not the best thing for rationalising... But he isn't there either. Perhaps he got word we were coming and departed. Two no-shows threaten to turn this mission into a farce, with just one more client to visit. I haven't had any breakfast, so it's with some relief that I'm directed to a cafe by the road, a good-sized place serving my favourite banana-based meat soup mtori.
As we sit down, I learn this is client number three. A textbook negligent client, he owes less than ten pounds on his last repayment, and has more than a hundred in hand - seemingly he didn't pay through lack of willingness rather than lack of finances. At any rate the nine of us spend more than half that on breakfast, and he does indeed cough up the money. Three attempted confiscations: two no-shows and one repayment. An easy ride of it, and I'm glad I didn't have to see anything worse. We drive back to Dar, Christmas songs about snow and mistletoe forming an unlikely accompliment to dusty roads and brightly-coloured buses, though the ever-pervasive heat is dampened by some seasonal rain. Ho ho ho.
So no baseball bat action this time. Hey James, you should right a book. James Livermore: Left Wing Militant To Loan Shark Gangster. But, in all seriousness, sounds pretty interesting. Hope all is well with you out in Africa mate. Best wishes. Andy
ReplyDeleteEnjoy it enormously. Keep at it ! If they turn down your job, you can write for a living !
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