My story on avoiding debt

My father lost his job in June 2012, just some days to his birthday (harsh right?)….Yeah I know. He worked in a bank for a long time (Afribank) and was laid off in the said date due to the distress that hit the bank in the fall of 2011. The central bank of Nigeria had to intervene in the bank and two other banks with similar problems. In my the bank my father worked in, older staffs were retrenched, and as if that was not enough, they refused to pay them their entitlements on the termination of their employment, and instead of the bank to avail its ex-staff the opportunity of resigning, they sacked them out rightly, thereby debarring them from seeking gainful employment elsewhere.

How does a sack letter translate to a debar of further employment you may ask. Well in Nigeria, employment opportunities are very scarce and a lot of graduates are unemployed. The corporate environment is very demanding and most of the companies willing to employ fresh graduates have very high standards. The minimum is usually a second class upper in any university degree with some companies demanding for particular courses e.g. B.sc accounting, economics etc. Also, there are age limits for graduate entry positions with the usual limit set at 26 years old and in exceptional cases 24 years old. Trust me it is very difficult to find a graduate in Nigeria within the age range. I am one of the few Nigerians lucky enough to gain admission into the university immediately after finishing my secondary school. That is why I was able to graduate at the 20 years of age, and finish my Nysc at 21. Most of my colleagues in school were way older. Moving on, setting the minimum degree as a second class upper made it an uphill task for Nigerian graduates with lower grades to secure a job. It is not all rosey for second class upper graduates and first class graduates too because I know some of my colleagues who graduated with a 2:1 or 1:1 that are currently unemployed or taking contract jobs.

Why am I going on about this? Forgive me, I am just trying to paint a picture of how difficult it is for a young graduate to get a job in Nigeria, talk less of someone who has worked for long, is getting old, and has been sacked. The probability of getting a new job for the latter is about 0.000001.

Life has been tough for the past 4 years, no entitlements to build on, and while he was working, the bank paid substandard salaries compared to what their counterparts were earning in other banks. My parents have two children, myself and my elder sister. I was in my second year (200 level) of my B.sc Accounting degree, while my sister was in her fourth year (400 level) of her MBBS degree (Medical degree). This means we had like 2 years left of school. Luckily, our tuition was not as expensive as private universities. We were both lucky to secure admission fresh out of secondary school in the same federal university (Unilag); the government subsidizes tuition fees of federal universities.

Oops, forgot to mention that my mother works for the local government, and their salaries are nothing to write home about (Google it if you don’t believe me).luckily for her, they give little periodic allowances, for example if there is a celebration like Christmas. I give credit to my mother for being so strong at the time of difficulty, and for always trying to cheer we the children up even though it was quite palpable that her spirit was downcast. She single handedly sent us both through the university since the day my father lost his job, and she took on the burden of being the bread winner of the family.

How did she manage this you may ask? Well, we had to be frugal in our spending; we cut unnecessary costs and avoided debt as much as possible. I apologize for my long story, but the purpose of this post is to see God’s take on debt for both borrowers and lenders. So what does the bible say about debt? Proverbs 22:7 states that “the rich rule over the poor and the borrower is slave to the lender”. Take a minute to think about this verse. What do you think it means? In my opinion I think it is trying to say that a borrower becomes at the mercy of the lender, and the lender feels he has dominion over the affairs of your life just because the borrower owes him some money. This is valid in modern times because a creditor (lender) can take an individual or organization to court if he feels they would be unable to repay back the money owed, and proceedings for bankruptcy and liquidation ensues. Take for example in a corporate environment; creditors are the top of the list for parties to be settled in liquidation. They can initiate liquidation proceeds and are settled even before the owners of the business (equity holders).

We have taking a brief look at borrowing, but what does God say about lending? In my opinion, God wants us to lend to others, to help the poor and the needy, to be generous unto them. This is evident in the following verses: Matthew 5:42 , Deuteronomy 15:6,  28:12 ; 1 Timothy 6:17, Psalm 112:4-9. Deuteronomy 15:6 ,28:12 jointly say that we would lend to many, but borrow from none. We can take this as God’s desire to be cheerful givers, lending to the best of ability, but he doesn’t desire that we borrow.

The bible says that when we lend, we should lend without expecting a reward (Luke 6:35) for our reward is coming from God himself (Proverbs 19:18). My advice is to be wise in your lending because money causes a lot of broken relationships; if there is a default in payment, lenders may become hostile to borrowers, and borrowers may start avoiding the lenders. So my dear friends, when you lend, lend the amount you know you can part with easily in case of a default. Growing up, I learnt from my mother this principle of lending I am sharing with you my esteemed readers. If anyone came to ask her for a loan, she would check the amount to see if it is something she can give the person, meaning that she would check her financial capacity to see if she can handle the loan as a dash. If she sees that the figure of the loan is above her capacity, she would notify the borrower that she would be unable to loan the amount, but she would offer a significantly lower amount, maybe a one-fourth of the money without a need to pay her back.

She told me that if she gives loans to people, she takes it as a dash because she wouldn’t want to go about fighting them to repay, especially of the amount is huge. That is why she gives according to what she can dash. If you are in need and you don’t currently have the means, it is not a sin to borrow; at least I don’t think I have seen it anywhere in the bible that it is a sin to borrow, bible scholars can prove me wrong. Remember though that when we borrow, we are required to pay back. Romans 13:7 says  “Give everyone what you owe him. If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honour, then honour ” (NIV).  Psalm 37:21 also says that “the wicked borrow but do not repay back, but the righteous gives generously. So remember people, we need to pay back what we borrow.

 

How can we reduce our borrowing frequency?

The first thing to do is to live according to your financial ability. Don’t live a fake life to impress people or for ego sake. Instead, live a prudent life, giving thought to the future, and praying to God to finance your needs. You should back your prayers up with hardwork and diligence. Also, if you must borrow, do so for only things that are absolutely necessary, things you need and not just what you want. May God help us as we live a debt free life….Amen.