Civil servants sitting ducks for cash loans
Low salaries, predatory microlenders and gaps in the law are driving public servants into crippling debt cycles, a parliamentary committee has heard. Although the risk of defaulting is almost zero as a number of microlenders have access to borrowers’ salaries, often as low as N$3 000 a month, they still charge exorbitant interest rates. This […] The post Civil servants sitting ducks for cash loans appeared first on The Namibian .
Low salaries, predatory microlenders and gaps in the law are driving public servants into crippling debt cycles, a parliamentary committee has heard.
Although the risk of defaulting is almost zero as a number of microlenders have access to borrowers’ salaries, often as low as N$3 000 a month, they still charge exorbitant interest rates.
This comes as the parliamentary standing committee on economics, which held a hearing last Friday, is investigating whether existing laws adequately protect Namibians against lending institutions and informal moneylenders.
Committee chairperson Iipumbu Shiimi yesterday said the committee is reviewing a motion on the impact of lending practices on citizens, particularly public servants.
“Our committee is still in the process of engaging various stakeholders to find effective ways of addressing high household debt, especially among civil servants.
We have, however, observed some factors that seem to be contributing to their high indebtedness,” he said.
Shiimi said a number of civil servants are left with little take-home pay due to multiple loan repayments to microlenders.
