I want to urge Government to investigate the manner in which lending institutions on the Copperbelt have been deducting money from retrenched miner’s packages that obtained loans from them during their employment.
It is sad and disturbing that some retrenched miners who borrowed money from the Micro Finance Service providers went home bare handed with blank cheques after lending institutions deducted everything from their retrenchment packages.
Most miners have complained that they feel cheated by lending institution. I therefore instituted my own investigation in the matter and my findings have revealed that over 50 percent of retrenched miners have walked home with literally nothing despite most of them getting as much as over K50, 000 as retrenchment packages from their former employers, a situation which is very unfortunate.
For example, Bayport Financial Services Zambia deducted over K45, 000 one off from a client who obtained a K45, 000 loan and has been paying K2, 279 per month for over 12 months. Basic calculations show that this particular client has paid over half of the principal amount borrowed (K45, 000) and yet Bayport deducted the entire retrenchment package after Income Tax deductions resulting in the client walking away with literally nothing. I spoke with three (3) Bayport employees from both Lusaka head office and Kitwe offices and all of them could not properly explain the rationale behind this particular case.
Looking at the circumstances in which the retrenched miners lost their jobs, and were forced to clear their loans at once, lending institutions should have revised their interest rates downwards especially that the money was paid in a shorter period compared to the agreed time frame.
Considering the commitment shown by government to empower retrenched miners through infrastructure development projects as announced by Republican President Edgar Lungu, it is imperative that government intervenes and investigates whether the deductions are being done in accordance with the laid down laws and that no one is illegally benefiting from the retrenched miners.
As a way of showing care and concern, Government should consider dialoguing with all the lending institutions involved to come up with a loan repayment model that would prevent a situation were retrenched miners walk home with nothing other than a pay slip.
For example, government can negotiate for the retrenched miners for them to be allowed to pay six months upfront as opposed to deducting everything since it has assured the nation that the retrenched miners will be re-employed in the next few months. This will allow miners to have enough money to plan their lives and invest in some businesses that would allow them to continue repaying the loans after the initial six months elapses with or without government providing them employment.
It is sad that retrenched miners will fail to provide basic needs for their families and pay children’s education fees next month despite having received good packages from their former employers.
By David Kapoma
This is business guys.
DID YOU READ THE ”FINE PRINT” WHEN YOU SIGNED THE LOAN AGREEMENT??
Lets hope than Chikwanda & Co. have red fine print when subscribing to bond issue
Did you ask government before getting those loans.Bashi Maini bwafya sana.Shout and dance Pabwato & Donchi Kubeba now.
It is not Lending institutions. It is Fintu ni Lungu.
Lending institutions make more money the longer the payment period. When you decide to shorten the payment period, there is a penalty. That is why it is important to read the terms and conditions of the loan
The evil meaning of “Terms & Conditions apply” is evidently being abused here. Loans are a bad thing, no one dies because they didn’t get a loan. Better to agonize via extensive saving than being victimized as witnessed here!
its difficult to comment but just to sympathize with our colleagues on the CB.
When you are paying off a loan at a goal, it doesn’t mean they just deduct the outstanding amount. They will also charge you the interest they were supposed to get if paid it in installments. Before signing such agreements, get a lawyer to read the fine/small print that is found at the back of the document.
It is very sad. Most likely these loans were being negotiated by the human resource department of these mining houses. After dumping the people into the pool of unemployment, these senior managers at MCM should have gone back to BAYPORT to negotiate how their employee loans should be recovered from their former employees. It is important for these lending institution to realise that they are digging their own graves as no miner in their right senses will obtain loans after seeing what is happening to their colleagues. Please remember that the years of high copper prices are ahead as Africa and Asia grapple with power shortages. You will still need these same miners to borrow your money to make a profit through interest charges.
This is the behaviour of Zambian business men, they have no…
A loan is a contract betwen the concerned parties and the signitories thereto are bound by the terms of the contract. Unfortunately, the government cant renegotiate the contractual rates or terms as agreed by the parties conciously. notwithstanding, o thougt Lungu said they retirement packages would be tax free……
Can the writer, Mr David Kapoma, also tell us what the loan was obtained for? If it’s a car that the miner bought (for sure it was not any meaningful investment like a house but seems like the cost of a car), it was careless decision at that level of salary. Don’t blame anyone for your failure to live within your means or plan your monies. The only advice for you at this juncture is to sell the car and recover some money.
That is why they say banks are not your friends. There is nothing wrong they did here just pull up socks together and see the next phase in your life. Otherwise it will be an academic exercise to expect this government to negotiate for you. Just see that you vote wisely on 11 August, 2016 not tribal so that an economic manager can come to your rescue, otherwise for now, ni zero ba shimaini.
SIMPLE MATHEMATICS ABOVE .
HE PAID THE INTEREST IN OVER 12 MONTHS WITH RECURRENT
INTEREST AND PENALTIES ON UN-REMITTED INSTALLMENTS PENDING RECOVERY .
FINALLY THEY GOT THE LOAN AMOUNT.
And i quote “Bayport Financial Services Zambia deducted over K45, 000 one off from a client who obtained a K45, 000 loan and has been paying K2, 279 per month for over 12 Emonths.”
…this is MOPANI payslip and not Bayport statement….MOPANI was responsible for recovering the loan on behalf of Bayport….the culprit here is MOPANI…Kapoma was supposed to tell us how much was the interest…therefore if miner X got K45,000, then he owed Bayport K45,000 plus the interest….which may be K61, 200 @ 36% interest…what was the agreement or terms and conditions of the loan upon termination of employment…whether fired, death, resigning or retrenchment..??…how does Kapoma provoke a debate with half baked information he claim to have investigated…??…rubbish..
So where do you think the bank is going to get its money when you are retrenched and unemployed? This is what happens when you obtain bad debt and not good debt that you invest and the money works for you…these are simple financial fundamentals and basis even our govt doesn’t know!!
He has raised a serious issue right here. Yes government must ensure that nothing is stolen from the poor miners.