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Let’s improve credit culture!

ZAMBIA has for a long time repeatedly established various types of State and quasi-State organisations to spearhead development.
These organisations have varied from those providing finance, agricultural equipment and inputs, to mortgages and even building materials.
Sadly, few have stood the test of time and succeeded in the mission of aiding development in the nation.
Many have collapsed or have simply been wound up under the burden of debt.
For example the country had Agricultural Finance Company (AFC) created to provide equipment, finance and technical assistance to farmers, it collapsed.
Lima bank was another finance institution that established with good intentions but it also died an unnatural death.
The Co-operative bank was another institution created with much hype about how it would change the agricultural sector but its life was short lived.
The Development Bank of Zambia (DBZ) is the latest in the line of casualties that have at least up to now failed to live up to its expectation of providing affordable development finance. The list is long.
There are many and even more complex reasons why these entire organisations have failed to perform to expectation but key among them is the poor credit culture among Zambians fertilised by the “Niva Boma and entitlement syndrome.”
Let us face it; Zambians are poor at paying back debt whether at personal level or institutional level. Many so called businessmen and women borrow with no intentions of paying back at all.
It is staggering to learn that DBZ had 98 percent none performing loans. This is a scandal but it represents the poor credit culture that is prevalent in our society.
Sadly, the society frowns upon any serious measures to recover funds such as the use of bailiffs or any other legal means, they would rather the money goes down the drain.
As the New dawn government goes full throttle in providing loans under the Constituency Development Fund (CDF), care must taken to ensure that the funds do not just go down a black bottomless pit.
Equally the Citizens Economic Empowerment Commission (CEEC) should conduct sufficient Risk analysis before issuing loans. The country can no longer afford to throw money at bad payers.
The bottom line is that Zambians need to change their credit culture and learn to pay back.
The poor credit culture is a major setback to having a thriving development finance institution