Weird economic times are for vultures.
Since the beginning of the credit crunch, which, in the beginning was not thought to affect Batswana, at least according to government enclave mandarins, it has turned out to be a sparkling period for debt collectors, pawn shops and undertakers, who are smiling all the way to their banks as the effects of global crisis bite on most of Batswana.
The debt collectors are currently at the busiest stage this year as we see the odds tipping in their favour.
Collins Tumeletso, a debt collector, says his job requires him to act as a go between when one party is being owed by the other, and the one who is owed decides to engage his services to get what belongs to him.
He alleges that it’s quite obvious that the cases they receive have risen significantly during the period of the credit crunch.
“People’s budgets are strained; some have been removed from work, while some are getting only half of their salaries. They can’t afford to pay off some of their loans, but at the end of the day, a debt is a debt, and it has to be paid,” he said.
Botswana Financial Statistics places the total household debt in Botswana around January at about P 10.5 billion.
As is the current situation in Botswana, the credit crunch has seen companies like mining giant, Debswana Diamond Company, suspending production for four months up to April while other mining houses embarked on an outright retrenchment exercise.
Some had not paid off half their loans and it was only viable that they consider selling their valuables, either to pay off loans to get debt collectors off their back or to auction off their houses and cars to sustain a moderate way of living.
There was a point when Debswana employees, who mostly deal with commercial banks, were placed under the exclusion list, which meant that they could not receive any loans from the banks, and this was during a time when they only got 30 percent of their salaries, which was not enough for some to maintain their lifestyle.
As such, they have now started to visit the heartless places like pawn shops or face the ruthless debt collectors who make money out of other people’s misery.
It is understood that pawn shops saw a boost in their sales as well, as now people were selling materials that were not of necessity.
Mainly big flat screen monitors and televisions, laptops, music systems and expensive phones are being pawned or sold.
As it was, Botswana workers in the mining sector were less fortunate than others.
“The mining sector and related industries have been directly affected by the global recession. This has led to a number of job losses in the sector. Other sectors, such as the financial services, have not had major job cuts,” Capital Asset Management Chief Executive Officer, Leutlwetse Tumelo, said.
Contrary to expectations that more people from the affected sectors would be selling their houses and cars, the opposite happened.
According to an auctioneer, Machin Mothibamele, the demand for houses in particular has actually risen; more people want to own houses.
“Right now as we speak, the demand for houses is very high,” Mothibamele said, but most of them are not first home buyers.
“We actually thought that at this stage bank repossessions were going to be huge but we haven’t seen that as of yet; the cases whereby repossessions are occurring are with old cases that have been chased for some time,” he said, referring to the delinquent defaulters.
In Mothibamele’s opinion, the banks are still practicing the compassionate factor whilst trying to ride out the period of the global crisis.
“The banks are not even trying to attach their possession,” said Mothibamele.
Another auctioneer thought that the recession had left people with security alerts and some are now only realizing the importance of having a house and thus there are many people who want to buy houses but there are no viable houses on the market because some of them are overpriced at this point in time.
Tumelo explained that the job losses seen in the country were less than anticipated.
“Job losses in the country have not been as high as might have been initially thought. People, therefore, are still in a position to buy houses. We have also not seen an increase in the number of new houses or plots to a level that would meet demand,” Tumelo said.
