# Social Category > South African Politics Forum >  Microlenders to blame for wage demands

## IanF

This article rings true and is worrying Trevor Manuel blames Microlenders




> UNSECURED lending is a significant factor in unprecedented demands for a 100% wage hike, Minister in the Presidency Trevor Manuel says.
> 
> Addressing a conference in Sandton on Thursday on business and transparency, Mr Manuel said unsecured lending also played a role in the deaths of 34 miners killed at Lonmins Marikana mine last year after a standoff over wages.
> 
> Mr Manuel blamed microlenders for the high wage demands issued by the Association of Mineworkers and Construction Union (Amcu).
> 
> Amcu is seeking increases of more than 100% for all unskilled and semiskilled employees in the gold sector. Its demands include a minimum entry-level wage of R11,500 for surface workers and R12,500 for underground workers.
> 
> At present, the minimum wage in the gold industry is about R5,000 and varies slightly according to mining houses.
> ...


I haven't had the pleasure of having garnishee orders for my staff but have seen how this lending screws up people's lives. What is worrying me is the one solution is to demand higher wages instead of educating the masses into a savings culture. Then the addon costs that these guys incur when lawyers phone and insurance and whatever is sickening. 
The government is trying with the NCA but needs more education for the poor suckers who get caught in this. I just can't see how the people involved in this feel it is moral. 
Anyway rant over.  :No:

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## Dave A

> I haven't had the pleasure of having garnishee orders for my staff but have seen how this lending screws up people's lives. What is worrying me is the one solution is to demand higher wages instead of educating the masses into a savings culture. Then the addon costs that these guys incur when lawyers phone and insurance and whatever is sickening. 
> The government is trying with the NCA but needs more education for the poor suckers who get caught in this.


Teach everyone one thing to put the brakes on this - the _in duplum_ rule. And it's an area where businesses can help when it comes to garnishee orders too.

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## ians

The bling is confusing people, the big TV, the fancy car, etc. The problem is not the bling, it the access to the HP for the bling. I agree that the micro lenders and banks are to blame, its a vicious circle. The bank gives the money to buy the house, the person can afford the house but not all the other commitments and bling which comes with owning a house, rates and taxes etc, so they go borrow money, now because they have a house they get credit and so the cycle begins, the more debt the more loans.

For people who have better salaries or jobs get credit cards and the same thing they roll credit cards, pretty much the same thing the micro lenders do to the less fortunate people.

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## IanF

> Teach everyone one thing to put the brakes on this - the _in duplum_ rule. And it's an area where businesses can help when it comes to garnishee orders too.


Dave I wonder why Trevor Manuel did not bring this up or maybe it was ignored by the reporter? Have you used this yet?

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## polpak

Always are those who offer more, without being clear of costs... Is there a need for more financial 
education,  perhaps simple budgeting mandatory ? 

The difference between chaos and living, is managing debt repayments.

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## Dave A

> Have you used this yet?


I have one staff member with a garnishee order, and the time for me to declare the debt satisfied (by virtue of _in duplum_) is drawing close. It's going to be interesting moment, I'm sure.

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## ians

The other problem is you have these people visiting sites where we work, then they start harassing my staff and threatening them, which in turn causing a loss of production, staff with problems are non productive.

It is not the micro lenders at fault, it is like pointing finger at a hooker, who is really to blame, you create the market, someone will make the services available. The people using the hookers should be named and shamed not the hooker.

I had to laugh at the police the other day, they made a big appearance guns out, cleaning up the streets, throwing the hookers into the van, big deal, the joke was as they were loading them into the van, so more where appearing further back down the road. I started taking pictures of the cars collecting the hookers, then you see a reaction, once they realised I was filming the people collecting the hookers, so business slowed down and the cars where no longer stopping. As soon as they notice the camera they speed off.

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## Miro Bagrov

What's the difference between micro lenders and macro lenders? Why bash the small guy? 
Small guys, do small damage.


Banks these days are desperate to sell a loan to any person who walks into their branches.


According to SARB, 69% of South Africans are in debt.

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## IanF

Macro lenders lend to the financially savvy clients. Micro lenders to the smaller uneducated clients who don't have the savvy. BTW this is also a problem in the UK 



> Clampdown on payday loan firms as complaints rocket
> Kate Devlin and Martin Williams
> Tuesday 2 July 2013
> MORE than 100 Scots a week are lodging complaints about payday loan companies.LINK


What gets me is the lenders and the whole "industry" that knowingly rip off these guys. I heard that banks then add on admin fees insurance etc. then when the lawyers get hold of the account they charge for every phonecall. This is were the President needs to restart the moral regeneration campaign he was supposed to head when he was Deputy President.
Will it happen?
 :No:

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## msmoorad

> The bling is confusing people, the big TV, the fancy car, etc. The problem is not the bling, it the access to the HP for the bling. I agree that the micro lenders and banks are to blame, its a vicious circle. The bank gives the money to buy the house, the person can afford the house but not all the other commitments and bling which comes with owning a house, rates and taxes etc, so they go borrow money, now because they have a house they get credit and so the cycle begins, the more debt the more loans.
> 
> For people who have better salaries or jobs get credit cards and the same thing they roll credit cards, pretty much the same thing the micro lenders do to the less fortunate people.


you are correct

and then when any programme is launched to teach people how to manage their money, its almost laways the banks or other lending institutes that sponsor it.
talk of a conflict of interest
their advice is not really the soundest cos they still make it seem as if borrowing from the bank etc or buying on HP is OK but they "teach" people not to borrow more than they can afford to make payments on monthy.

the best advice is to only buy for cash
until u can afford it, do without it

and we know how difficult it is for those who have been deprived for so long & suddenly have access to everything to control themselves.

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## Dave A

> What's the difference between micro lenders and macro lenders? Why bash the small guy? 
> Small guys, do small damage.


Micro lenders aren't necessarily small operations - they just specialise in small, short term loans - typically at very high interest rates.

The effect on disposable income of pay day loan operators in the UK has also come under fire in the past week or so - a very similar issue. (EDIT: I see IanF has also brought up this point while I was drafting this response.) 

Also, the individual operators may be small by comparison to the big banks, but do not underestimate the size of this sector as a whole, and its ability to significantly affect the shape of our economy - especially in the low income bracket.




> Dave I wonder why Trevor Manuel did not bring this up or maybe it was ignored by the reporter?


I've been chewing over that, and on reflection I suspect "in duplum" and pretty much the rest of the NCA is near worthless as a measure to control damaging credit provision in the micro loan market. These are aggressive operators not averse to risk and stretching the law past its limits, both in credit extension and collection.

It's a problem that is definitely going to need a multi-faceted response.

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## adrianh

There is an additional problem. When I was down and out I owed a dentist R1,500. They eventually handed me over to their lawyers. The lawyer phoned me a day later and told me that I now owe the lawyer R2,100. So, the lawyer makes one phone call and he feels that it is worth R600. I told the collection lady exactly what i think of her, her boss, her boss's dog and where they can all go jump off. I paid the dentist R1,500 directly and zero to the lawyer. We wait and see whether the lawyer is going to try to get the R600 from me.

Ok, so why do I tell you this story; simply because the people who are already in the crap because the owe money and pushed deeper into the crap by lawyers, debt collectors etc. The problem is far bigger than micro lenders, the problem goes across board, the only difference between a macro and a micro lender is that the oe takes your house and the other takes your kneecaps.

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## bjsteyn

> There is an additional problem. When I was down and out I owed a dentist R1,500. They eventually handed me over to their lawyers. The lawyer phoned me a day later and told me that I now owe the lawyer R2,100. So, the lawyer makes one phone call and he feels that it is worth R600. I told the collection lady exactly what i think of her, her boss, her boss's dog and where they can all go jump off. I paid the dentist R1,500 directly and zero to the lawyer. We wait and see whether the lawyer is going to try to get the R600 from me.
> 
> Ok, so why do I tell you this story; simply because the people who are already in the crap because the owe money and pushed deeper into the crap by lawyers, debt collectors etc. The problem is far bigger than micro lenders, the problem goes across board, the only difference between a macro and a micro lender is that the oe takes your house and the other takes your kneecaps.


Hey @AdrianH, i feel your sentiments. About a 2 years back, i was earning about R3500 (doing computer programming, believe it or not). I was working at the company for about 3 months, yet FNB gave me a lone for R25000 and I had to pay back R50000 over 3 years.. That was my first real permanent job, up until that point i was working for myself and i was not getting by because it is hard to work for yourself if you don't have transport. So i said OK ill take the job,  it is something to put on my CV and thought they are just gonna look if i can do the job and raise my salary and they will relise that i know what i am doing. Didn't have transport and took out the loan, so i can get my own business going partime, doing IT stuff. I baught a new bike and after 6 months i was only earning R3800. I realised, im gonna go nowere at that company, as they want quantity not quality and was getting behind on my loan repayments. So i decided to quit the job, hell i could earn more working for debonairs. Neways, had to sell the bike, but still sat with the debt of about R42000.

I couldn't pay for a while and they handed me over to the lawyers. I have a solid job now, and have gotten what i ow down to R20000. But in March this year I made a payment for R1400, that 3 months later still hasn't been deducted off my fnb loan account, that i have paid interest on for 3 months that i shouldn't have. I have emailed the lawyers about 7 times about it and everytime i receive a return receipt that someone has read my mail (actually several per email, they definitly read it more than once) , but yet they do not respond to me.

I have also spoken to them on the phone about it about 3 times (When they make their monthly curtisy call, haha) and every time they say, they will look into it, yet nothing is done. So emailed them again and said i will not pay again until they sort it out.

Well today they phone me again (yes, i didn't make a payment this month. Took the money i normally paid them and invested as an short term investment to make back the interest i shouldn't have paid), and they threatend me that i will have to pay lawyers fees if i don't make a payment this month, yet i mention the missing money again. Again they said they will look into it today and get back to me, although that was second priority to them wanting a payment from me, and again they did not get back to me. They expect me to make a payment to them, yet R1400 of my money paid to them has gone missing and i have paid interest i shouldn't have.

I feel like taking them (fnb lawyers) to the lawyers and fnb as-well as a matter of fact. The lawyers for the R1400 that has gone missing, the interest i paid and all the stress they put me threw phoning 2 times, sometimes 3 times a month.(Haha, while im suing them why not add that!) . FNB because i was bound to fail on loan repayment on the salary i was earning, and they shouldn't have loaned me that money. I have no idee how they approved that loan. I wanted it, but they shouldn't have given it to me (now looking back)

If i could go back i would have never taken the loan in the place i was, but that is how you learn from your mistakes!

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## bjsteyn

Microlenders like wonga, definitely can help you when you need some urgent cash flow, but then again it is to easy to take a loan and you get into monthly habit of taking a loan. Yet your salary is actually going down every time you take a loan. I used them to get some cash flow (over 5 months) for paying of a new laptop and samsung galaxy note i baught threw the company i work at, to be more productive, yet i new i was losing money. My reasoning was that i know i am losing money, but with the right tools i will be more productive and earn the money back twice, as i am a entrepeneur always looking online and offline of ways making money. My cash flow is almost right again.

Eg. of how a monthly loan can get deteriarate:
Jan i take a loan for R750 i pay back a R1000 month end
Feb comes i am short some money so i am still short what i was last month, but an extra R250 as-well so i take another loan for a R1000 and pay back R1300 month end,
Mar comes and i take a loan again, what i was short last month, plus my interest on my loan, so total R1300. I pay back R1600 month end.
See where i'm going with this?

A micro loan will not sort out your money problems, it will make it worse. It is a temporary solution, which you should only use if
you have already formed a real solution to sort your money problems or if it is a once off thing.

Anyways, i hope i have a real solution, i believe i have and am woking on it every day, the light is near!

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Blurock (03-Jul-13), Dave A (03-Jul-13)

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## Blurock

Cash is king! One can only be free if you have no debt, morally or financially.

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## Dave S

> Cash is king! One can only be free if you have no debt, morally or financially.


+1, or at least have enough cash to cover any debt you may have

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## Dave S

Problem with the borrowing of cash from anywhere, micro or macro lenders, is that the people borrowing this cash are often in need just to buy food as their salaries are too low to support them, and the "vicious circle" trap is "the more you borrow, the more you need to pay back, the more money you need, the more you need to borrow".

If one looks at the world in general, there is "x" amount of income available, the high income of one person is offset by the low income of another, and so on. If everyone was earning a "living wage", then nobody would have any luxuries and massive corporations would tumble. The balance of nature (albeit, man-made), there has to be poor people and there has to be rich people, it's just the ratios are becoming corrupted by massive population growth, world-wide.

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## IanF

The saddest thing I have seen is a lady buying groceries in front of me in the queue and asking for that to be put on budget. 
BJ the sooner you can get out of the the money sucking lawyers clutches the better. If I was you I would have a look at the in duplum rule and enforce that if you have paid back more than twice your debt. But the definition of debt for that rule is not easy to interpret to me.

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## bjsteyn

> The saddest thing I have seen is a lady buying groceries in front of me in the queue and asking for that to be put on budget. 
> BJ the sooner you can get out of the the money sucking lawyers clutches the better. If I was you I would have a look at the in duplum rule and enforce that if you have paid back more than twice your debt. But the definition of debt for that rule is not easy to interpret to me.


I am going this weekend to fnb, to see if they can move the account back to them and away from the lawyers, and just deduct it from my bank account monthly. I have no idee how much of what i am owing is interest and how much is from the actual loan money.

If i understand the dumplum rule correctly, then the unpaid interest on the money i ow, can not be more than twice what i loaned. My total outstanding is R20000 so it is not even more than what i loaned,  so even if all of it was interest dumplum would not apply to me. :-(

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## ians

I got into a habit of always keeping my suppliers aware of my intentions and up to date with what was going on. I found they will let you ride out any cash flow issue you have for example or if you have a bad paying customer. IF I say I am going to pay on the 15th then I pay on that date, if I cant for some reason I make them aware days in advance.

It worked well until recently when one of the suppliers was bought out by someone else, I paid R30 000 as I promised on the Friday afternoon, Monday morning I went in to buy more stuff I was told my account was on hold, I battled for a month or 2 to scratch the money together to complete the project, got paid the full amount and paid all outstanding debts, except 1, that was last year in October, they are still trying to get the balance of the money out of me. The money is sitting in a savings account while they sort out all the legal stuff. Their lawyer sent me a whole lot of warning threatening letters, I am busy negotiating a settlement figue less the lawyers fees and less than the original figue. 

My point...stick to your word and communicate with people it makes life so much more pleasant.

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## bjsteyn

Question on the dumplum rule: If some of the capital was paid off, is dumplum calculated on the new capital still owing or on the original loan value?

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## IanF

Hi BJ my reading (I am not a lawyer ) is that it cannot exceed the capital amount of the original claim. So I would say the amount that the loan was handed over for to the lawyers which will include interest to that date. 

I hope the more learned guys correct this if I am wrong.

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## Dave A

In duplum is based on the capital value owed at the time of default. Essentially the total value of collection costs and interest charges raised against the debtor after default may not exceed that capital value.

Personally I think it should apply to interest only as was the case under the old Usury Act, but that's the way things stand currently under the National Credit Act.

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## david2677

Mirco lenders quench the drinking addicts and its a double blow to ones pocket. Very seldom employees borrow with a genuine cause, in the event of a genuine cause then they approach the employer and how often does one have such requests not from perverts

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## IanF

> I have one staff member with a garnishee order, and the time for me to declare the debt satisfied (by virtue of _in duplum_) is drawing close. It's going to be interesting moment, I'm sure.


Dave any feedback on the in duplum declaration?

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## Dave A

As she needed to clear her credit record, she settled the entire outstanding a couple of months ago and got the attorney who got the garnishee order to rescind the judgement. That ended the chance to test the waters.

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## Miro Bagrov

I think that the problem is the 'slave' attitude towards labour in SA. 

Many employers try to keep their workers dependent on them by keeping salaries as low as possible (encouraging the need to borrow), the need to return the interest keeps the worker glued to the boss' titty or else he will be in trouble. 

If the boss earns 20 000pm, he pays 2000 for labour ave. If he earns R60 000pm he pays R6000pm for labour (don't make me take out proof, because I have it). So unless the boss makes 100 000, there is no way for the worker to get 10 000 salary.... 
Workers are not seen as partners in production (who share in earnings), they are seen as residual waste on disposal of used up material (and are paid accordingly). Do you know how many workers owe wages to the boss in loans and early payments? 

The worker, btw, has a duty to fight for his financial independence from the boss and from the need to borrow. He has to see past the 'easy' and find an escape to the trap. Most of them just jump into the trap.

Now, how can micro-lenders be more at fault than employers. Or how can the boss be more guilty than the worker for having no discipline?

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## IanF

> The worker, btw, has a duty to fight for his financial independence from the boss and from the need to borrow. He has to see past the 'easy' and find an escape to the trap. Most of them just jump into the trap.
> 
> Now, how can micro-lenders be more at fault than employers. Or how can the boss be more guilty than the worker for having no discipline?


Hi Miro
This is a lot more complex than blaming the boss or the workers, but from what I see the microlenders are taking advantage of the workers lack of financial savvy. 
Then the workers also take advantage when they can. I had a case the other day where I promised some booklets by close of business there was a lot of finishing work, but come home time the job was left half done and when I asked why I just got a blank stare. I then had to finish the job which only took another 15 minutes so the promise could be kept. 
Now for next year I will try and change working times back to a 4:30 finish time. I agreed to letting them finish at 10 to 4 so they could get the early transport home with no drop in salary. There is a lack of team effort that I see even here which then gets a them and us situation. 
Anyway we all need to work together but it is hard to get to that situation. 
Micro lenders have seen the gap and exploited it but a lot needs to be done so that the them and us changes to the team.

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## Miro Bagrov

> Hi Miro
> This is a lot more complex than blaming the boss or the workers, but from what I see the microlenders are taking advantage of the workers lack of financial savvy.


Absolutely!  

My prediction is: There will be a rise in debt defaults in both micro-lenders and banks in the near future

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## adrianh

> Hi Miro
> This is a lot more complex than blaming the boss or the workers, but from what I see the microlenders are taking advantage of the workers lack of financial savvy. 
> Then the workers also take advantage when they can. I had a case the other day where I promised some booklets by close of business there was a lot of finishing work, but come home time the job was left half done and when I asked why I just got a blank stare. I then had to finish the job which only took another 15 minutes so the promise could be kept. 
> Now for next year I will try and change working times back to a 4:30 finish time. I agreed to letting them finish at 10 to 4 so they could get the early transport home with no drop in salary. There is a lack of team effort that I see even here which then gets a them and us situation. 
> Anyway we all need to work together but it is hard to get to that situation. 
> Micro lenders have seen the gap and exploited it but a lot needs to be done so that the them and us changes to the team.


There is a young white guy that pops in the shop now and again. He lives nearby is always complaining about not being able to find work. I decided to let him join me as he is decent and quite intelligent. He works for  couple of days and I don't need him one day. He complains to my wife that if he doesn't work then they don't eat. (this got up my nose because he had only worked for me for 3 days - what did they do then - trying to make us feel guilty is not a way to earn my sympathy) Anyhow, I let him work the day. He works the Thursday and then asks to have Friday off to get his ID. (I found this strange too because the government offices are walking distance from the shop and it doesn't take the whole day - I can vouch for it because I went to do my passport two moths ago) So Saturday comes and he works from 10am. 13H00 he asks if he can go home early.... Right, so lets get this straight, the guy doesn't have work, wants to get paid, wants me to feel guilty yet wants to work when it suits him. I have plenty of work and I can keep him occupied for 16 hours a day should he want it (I have said so on numerous occasions). I paid him, dropped him off and carried on working on my own. Bottom line, I'll give him a miss.

The problem in this country is the "I work for money, if you want loyalty get a dog" attitude. Very few people take responsibility for the bigger picture within the business, they care only about getting an hourly rate and going home when the hour is up. Most of my staff see the bigger picture because their salaries are directly tied to productivity. Its this simple, if we don't deliver then we don't get paid (me included) we do share whatever money is available at the end of the month. They understand that I do not get paid first, they get paid first and that we are all in the same boat. They work hard and put in as much effort as I do because we have all battled together for months. I suppose that is the other side of working at home, they get to see that I do not live like a king but that my family and I are no different to theirs.

Ok, the problem with labour is that they do not see the bigger picture in business, they do not see that if their part of the puzzle is not completed then no money comes in. Labour seem to think that the bosses simply sit back in their big leather chairs and exploit them. How do you get labour to see the bigger picture, maybe the trick is to paint the picture  on a canvas  small enough for them to wrap their minds around. It doesn't help to speak to labour in terms of large numbers, they do not understand (like saying I need to clear R100K to pay all expenses in the month) maybe one should show them where each cent goes, how the R5 paid for the work they do pays their own salary, how anther R5 pays the electricity etc.

Maybe the fault does lie with employers to a degree in that the employers do not paint the larger picture on a canvas small enough for them to grasp (small does not mean naïve or stupid, but rather in a manner suited to their own frame of reference) In analogy, I am sure that they could relate to the idea that the business is just as if their wife is baking cup cakes and selling them to keep the family going. If she fails to buy the ingredients there are no sales and no money, if she sells them below cost she loses money, if she just leaves them unfinished etc.. The point is that us as employers need to decomplicate the picture to such a degree that a seven year old can understand the implications of their actions.

My view regarding labour in this country remains unchanged: 99% of the locals that I have come across seem to feel that that the world owe them and that it is the employers privilege to employ them.

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Miro Bagrov (13-Nov-13)

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## adrianh

Now here is a case in point...yet again. My garden was in a bit of a mess so I asked my Zimbabwean guy to see if he can find a labourer on the local labour marketing street corner. Off he goes and comes back with an extremely well spoken guy. I don't pay much attention to the guy because my guy has it in hand. Two days go by and the guy does a sterling job on the garden. I start talking to him a bit to figure out what he is about. He is a Zimbabwean who studied marketing for thee years and then did a course in entrepreneurship. He finds himself here trying to get by until he can settle into a suitable job. The guy cleans garden, what a damn waste of talent. He works his butt of and does a tremendous job. Anyhow, we will speak tomorrow and I think that he is a guy that I can work with, he is motivated, driven, well spoken and intelligent. Now tell me who I should hire and work with, a person like him or a lazy ass locoal (black & white) I'm sure you know the answer.




> "Money will not purchase happiness for the man who has no concept of what he wants; money will not give him a code of values, if he's evaded the knowledge of what to value, and it will not provide him with a purpose, if he's evaded the choice of what to seek. Money will not buy intelligence for the fool, or admiration for the coward, or respect for the incompetent. The man who attempts to purchase the brains of his superiors to serve him, with his money replacing his judgment, ends up by becoming the victim of his inferiors. The men of intelligence desert him, but the cheats and the frauds come flocking to him, drawn by a law which he has not discovered: that no man may be smaller than his money. Is this the reason why you call it evil?


 - *Atlas Shrugged by Ayn Rand*




> “There is no such thing as a lousy job - only lousy men who don't care to do it.”


*― Ayn Rand, Atlas Shrugged* 




> “I do not seek the good of others as a sanction for my right to exist, nor do I recognize the good of others as a justification for their seizure of my property or their destruction of my life.”


― *Ayn Rand, Atlas Shrugged* 



hmmmm.....maybe the masses should read this book...maybe everybody should read the book or watch the movie...Ayn Rand captures so many profound concepts

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Miro Bagrov (13-Nov-13)

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## IanF

Adrian 
I hope you find something for your "Zimbabwean Gardener" as he has the right attitude and not looking for entitlement. Maybe this is why foreigners do well as they don't feel entitled to anything.

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## adrianh

I sure going to find something for him, I am able to make lots and lots of stuff and it is up to him, the marketer / entrepreneur to tell me what it is that I can make and that he can market. Lets see if the guy has the drive to make the most of the oppetunity offered to him....the locals certainly don't want to develop opportunities offered to them, they simply want to be given the reward on a platter.

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## Marq

Back to the original article that started this thread.....

Politics, amcu,num, cosatu and the like create an issue that has a knock on effect that creates a demand for more bucks.
The Corporates tell the politicians to go away.
The workers strike cause the Government tells them to.
They now have no bucks and have to borrow to stay alive.
The Corporate banks will not lend to this market.
The mico lenders come in and do the job.
Now Government through Trevor Manual (this time) tells all to blame the micro lenders.

Loan sharks have been around since time began, and have probably saved many a community. Yes there are high penalties and yes one should avoid them. These are the basics of life.

But once again Government, the Corporates and the banks who run this world have put in a red herring to take the real problem away from themselves.

The Banks are the main culprit here.
If they had not introduced the concept of interest and greed, there would not be a demand for more wages.
If they had not redlined the small guy with a dubious job, there would be lending at a more reasonable rate.
At the end of the day the Banks are equally as ruthless in collecting their outstandings as the loan sharks. They just take a longer route with more paperwork. The net effects financially are the same and the end results are also equal.

Equally to blame are politicians, union bosses and their racketeering operations. Forcing one to 'belong' and feigning representation when all they are doing is lining their own pockets at workers expense. Where are they when it comes to reviewing and regulating the law around the garnishee system? Where are they after they have stirred up the workers and created violence and negative spaces? Where are they in regulating the micro lending operations?  Where are they when the employee is retrenched and out in the cold? They are ones who have instilled the thoughts of rent boycotts, no pay options, service delivery demonstrations, inciting violence, toyi toyi for any reasons, necklacing and have shown a bad array of social and moral judgement. They are the ones who removed the traditional ways and replaced good  values with the seven deadly sins.

Right behind these snivelling poltroons are the Corporates for playing the same game and exploiting workers. 

I dont like loan sharks any more than the next guy, but I am sure they are the last ones to look at here. 
I am also sure that the Banks, Corporates and Government do far worse and offer a bigger threat to any of us, than all the loan sharks put together can create. 

You have all been spun by the chief doctor of spin.

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Dave A (14-Nov-13), ians (15-Nov-13), wynn (15-Nov-13)

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## adrianh

@Marq - makes a lot of sense!

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## polpak

Adrian

Also hope you find something for your "Zimbabwean Gardener" as certainly he appears to have the right attitude :-) 


Some years back found myself often assessing people in terms of whether they have made the huge (mental outlook) transition from being a hunter-gatherer to being a cultivator. 

In this the hunter-gatherers tend to be seeking short-term or immediate gratification,  then came cultivators - including traders, who were prepared to surrender short-term or immediate gains for longer-term larger gains. 



Mathew Ridley's theory (eg book "The Rational Optimist")  suggests while the ability to trade may sound like not much of an advantage, exchanging objects became a powerful adaptive mechanism in its own right, towards creating the developed world.

As early humans traded, they swapped objects made by them, such as fishing nets or game traps, for food, or swapped different types of gathered food for meat and so on;  This development of trading enabled individuals and groups to specialize at particular crafts, this has resulted in more and more improvements. 

Changes  particularly printing helped create the industrial age, then compulsory education accelerated the spread of learning, from wider opportunity followed the acceleration of these changes. 




Perhaps need wider, easier and more accurate, tests to identify individuals outlooks, whether more hunter-gatherer or more cultivator/trader, along with an education system to encourage those more hunter-gatherer, to either adapt better, or be encouraged towards where they may be more useful and successful.

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## polpak

Difference between a reasonable loan and an un-reasonable loan is only a few % points.



Loans were around since time began, along with loan sharks.


Loans also contributed to development of most the modern world.


Legislative challenge is to define reasonable rates.

At which multiple of the South African Reserve Banks Prime Overdraft Rate is an interest rate if higher unreasonable ?  

At which point may such rate not be legally collectable. 


Regardless of any measurement or boundaries, some will always chase loans with little if any consideration of the consequences.

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## ians

"There is a young white guy that pops in the shop now and again. He lives nearby is always complaining about not being able to find work. I decided to let him join me as he is decent and quite intelligent. He works for couple of days and I don't need him one day. He complains to my wife that if he doesn't work then they don't eat. (this got up my nose because he had only worked for me for 3 days - what did they do then - trying to make us feel guilty is not a way to earn my sympathy) Anyhow, I let him work the day. He works the Thursday and then asks to have Friday off to get his ID. (I found this strange too because the government offices are walking distance from the shop and it doesn't take the whole day - I can vouch for it because I went to do my passport two moths ago) So Saturday comes and he works from 10am. 13H00 he asks if he can go home early.... Right, so lets get this straight, the guy doesn't have work, wants to get paid, wants me to feel guilty yet wants to work when it suits him. I have plenty of work and I can keep him occupied for 16 hours a day should he want it (I have said so on numerous occasions). I paid him, dropped him off and carried on working on my own. Bottom line, I'll give him a miss."

I have had this on more than one occasion, from my experience...

You ask them to work on Saturday morning, make sure you don't pay him on Friday, other wise he will either come in smelling or booze or his mothe ror girlfriend will phone in and tell you he is not feeling well.

They spend more time smoking and on social networks than time they actually work.

Cry because they don't have money, but arrive at work with the latest top of the range cellphone and smoke all day.

My best so far...they come begging for work literally on their hands and knees, so you need someone and give them a job, 2 weeks later you are at the CCMA because they are not happy with the rate you are paying  :Mad: 

Just reading Adrian's post I am in pretty much the same boat and waiting patiently for him to find a solution that works  :Wink:

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## IanF

Here we are blaming everyone but the guy who willing took the loan!
Would a financial literacy course not be better. Nedbank's Eugene ads seem to go in that direction

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## adrianh

Sounds familiar. 

My solution is simply to no longer require his services. - due to "restructuring" - we got rid of his, chair, desk & tools.

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## adrianh

Maybe the problem goes deeper. We live in a country with the 1st world mixed within the 3rd world. Now lets look it the problem from a lateral perspective: One of the fundamental differences between the two worlds is that the first world is able to get more credit because they generally earn more. What is the difference between a guy earning R100K a month and spending Spending R101K a month on debt and a guy earning R500 a week and spending R501 rand...could it only be status?

Our problem as a society is not that we don't have enough money per se, it is planned obsolescent consumerism. We eat fast burning expensive crap food, we buy ridiculously over priced over specced cars & houses, we buy buy buy only to replace that which was good last year.

The problem lies within our marketing driven foolish minds that are made to believe that we all need to have just a bit more than we can afford, a better cell phone, car, shoe or whatever. We are unable to see that money is simply a tool like a shovel is a tool.

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## Marq

Thats quite right.
Fuelling this problem and keeping society foolish is the name of the game. The main culprits behind the scenes - advertising and marketing by the .......banks and corporates who know how to spin you a yarn or two.

Are they winning - :Big Grin:  


> Would a financial literacy course not be better. Nedbank's Eugene ads seem to go in that direction


Does Nedbank want to educate you or ....give you a loan and keep you in nice clothes and big car. 
I said it earlier - the banks are to blame for most things.
Its a vicious catch 22 scenario for most.

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tec0 (23-Dec-13)

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## adrianh

Now here is the question: Who is to blame, is it the marketer presenting the product, is it the bank providing the loan or is it the dumba$$ who can't help himself.

By analogy: If various ladies of the night offer their services in many different and exciting ways would everybody use their services because they are such good marketers & advertisers. How come most people are able to control the urge to buy their services yet they are unable to control the urge to buy a new TV or cellphone ?

Marketing does not put a gun against anybody's head to do anything, stupid people do stupid things because they are too stupid to realize that they are actually in control of their own urges, be it to shag the neighbours wife or buy a new BMW on credit.

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## Marq

Good point.

Seems subtle is more powerful than the gross.
But then the ladies of the night are not on every street corner or selling me their wares (is that the right term here) every five minutes on the box - so not sure if that is a fair reflection of outcomes.

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## Miro Bagrov

> Now here is the question: Who is to blame, is it the marketer presenting the product, is it the bank providing the loan or is it the dumba$$ who can't help himself.
> 
> By analogy: If various ladies of the night offer their services in many different and exciting ways would everybody use their services because they are such good marketers & advertisers. How come most people are able to control the urge to buy their services yet they are unable to control the urge to buy a new TV or cellphone ?
> 
> Marketing does not put a gun against anybody's head to do anything, stupid people do stupid things because they are too stupid to realize that they are actually in control of their own urges, be it to shag the neighbours wife or buy a new BMW on credit.


Well - what you are seeing is just the message that the boss at Treasury wants to send out to the micro-lenders, to say 'I will come down on you!'

You see the micro-lenders are not the problem here. The government is slipping into chaos, and losing control of the interest rates in SA.

So the name of the game is, make more trouble for micro-lenders, so that the banks can get back their clients. That's because the banks are going down. The government is going down. The international system of markets are going down.

The issue, really, is, that the market is getting less and less sensitive to the Reserve Bank's changes in interest rates. Slowly, they are losing the ability to tell lenders on the sidelines how much they can charge for loans. 

That's the whole point. It's obviously not the micro-lender's fault.
--- Because if they want to attack micro-loans, they must also attack unsecured-lending-accounts (credit cards & 'short-term' loans) of the major retail banks. 
But somehow, they are not attacking the banks, who, by the way, have a larger % share in the micro-loan market than micro-lenders!

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adrianh (25-Nov-13)

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## Dave S

Let's put ourselves in the shoes of the "have-nots". A chap is walking through the rain from a taxi rank and a guy drives past in his Beemer and splashes a puddle of water over the guy, now this chap is even more determined to get a set of wheels so he doesn't need to get wet every day, he can't afford cash, so he takes a loan and buys a small car. Or the maid who is cleaning house, when the lady of the house turns on the 3D Multi-View, space-age TV that has 1000 channels, the maid also wants this, so she takes a loan and gets a small new TV.

The banks and institutions that have given him/her the loan did a credit check and manipulated it so that they could lend/borrow the money and they know that when (not if) these persons default, they will be able to take back the car/tv and sell these, but the defaulter is still responsible for the loan, so they get their money either way, at the same time the institution that gave the loan will have claimed from a defaulter insurance policy, so they end up with even more money than what was defined by the original loan. In short the bank wins!

Now the guy who bought a car is still walking in the rain but he also has to pay the variance from the loan, so he is even more in financial doodie.

The old saying "if you take a loan, make sure you can cover it in cash" does not ring true as regards people that don't have cash in the first place.

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## IanF

From a moneyweb article



> The Gilbert affair
> 
> Gilbert this month presented Moneyweb with files which he believes prove systemic garnishee fraud in the industry. He has also made the claim that some customers are charged for credit life insurance at a rate of 18.5 times a related industry benchmark, which would be unlawful in terms of the National Credit Act (NCA).
> 
> Moneyweb is currently investigating these claims.


What this seems to imply is that there is a lot of underhanded dealings in obtaining the garnishee orders instead of working within the rules. This then does cause hardship for the guys who go home with no or little of their earnings.
The real question is "Is there anyone in government willing to try and sort this out."

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Dave A (18-Nov-13)

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## Marq

I keep getting junk mail, blank credit cards and offers of loans in my postbox. 
This is done using information that I do not normally use out there. 
I realised last month where the source of this junk mail comes from. 
Its via my staff, who all have credit with these retail stores, banks and micro loan companies.
So not only have they captured the salaries of my staff, they also spam me and expect me to advance loans and salaries inhouse to pay for their creations.
I now do a weekly rant and rave to the staff who hopefully are getting the picture.
Their reasons for taking out the loans and credit in the first place......Angazi! everybody does and its nice to have nice stuff.

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## polpak

Education is the key to resolve - well reduce, this problem.


Is not useful telling others loans are not possible, firstly because most shall not believe this, second we all notice how the wealthy obtain loans for everything to improve their lives, so why not the rest of us ? 

Many of today's wealthy once were poor, well not so wealthy.




Need educate to ensure others learn how to recognize when credit becomes a dangerous risk to them, learn to recognize their personal risk points.


Need learn how our incomes divide into essential, optional and dangerous commitments, some commitments of long term benefit, many of very short term benefit and perhaps longer term difficulty.  


This will not be achieved quickly, many of us once were slow learners :-)



We all need learn how much of our incomes are committed already, how much not yet committed, how only the small percentage of not yet committed money should be committed, to retain a percentage for unexpected changes or disasters.   

Is useful to understand how credit levels obtained but not used, enable short term essentials to be met. 


Show individuals how by managing their reserve cash account, using it as the meanest credit provider around. demanding largest % of interest and quickest repayments, can allow them to grow their wealth to where they can afford more than they expected.



Are these basics taught adequately in schools, particularly to those on low incomes ?

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adrianh (25-Nov-13)

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## bjsteyn

> Hey @AdrianH, i feel your sentiments. About a 2 years back, i was earning about R3500 (doing computer programming, believe it or not). I was working at the company for about 3 months, yet FNB gave me a lone for R25000 and I had to pay back R50000 over 3 years.. That was my first real permanent job, up until that point i was working for myself and i was not getting by because it is hard to work for yourself if you don't have transport. So i said OK ill take the job,  it is something to put on my CV and thought they are just gonna look if i can do the job and raise my salary and they will relise that i know what i am doing. Didn't have transport and took out the loan, so i can get my own business going partime, doing IT stuff. I baught a new bike and after 6 months i was only earning R3800. I realised, im gonna go nowere at that company, as they want quantity not quality and was getting behind on my loan repayments. So i decided to quit the job, hell i could earn more working for debonairs. Neways, had to sell the bike, but still sat with the debt of about R42000.
> 
> I couldn't pay for a while and they handed me over to the lawyers. I have a solid job now, and have gotten what i ow down to R20000. But in March this year I made a payment for R1400, that 3 months later still hasn't been deducted off my fnb loan account, that i have paid interest on for 3 months that i shouldn't have. I have emailed the lawyers about 7 times about it and everytime i receive a return receipt that someone has read my mail (actually several per email, they definitly read it more than once) , but yet they do not respond to me.
> 
> I have also spoken to them on the phone about it about 3 times (When they make their monthly curtisy call, haha) and every time they say, they will look into it, yet nothing is done. So emailed them again and said i will not pay again until they sort it out.
> 
> Well today they phone me again (yes, i didn't make a payment this month. Took the money i normally paid them and invested as an short term investment to make back the interest i shouldn't have paid), and they threatend me that i will have to pay lawyers fees if i don't make a payment this month, yet i mention the missing money again. Again they said they will look into it today and get back to me, although that was second priority to them wanting a payment from me, and again they did not get back to me. They expect me to make a payment to them, yet R1400 of my money paid to them has gone missing and i have paid interest i shouldn't have.
> 
> I feel like taking them (fnb lawyers) to the lawyers and fnb as-well as a matter of fact. The lawyers for the R1400 that has gone missing, the interest i paid and all the stress they put me threw phoning 2 times, sometimes 3 times a month.(Haha, while im suing them why not add that!) . FNB because i was bound to fail on loan repayment on the salary i was earning, and they shouldn't have loaned me that money. I have no idee how they approved that loan. I wanted it, but they shouldn't have given it to me (now looking back)
> ...


Finally settled my FNB loan, i can breath again!

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## Dave A

> Finally settled my FNB loan, i can breath again!


Feels good, doesn't it  :Smile:

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## bjsteyn

> Feels good, doesn't it


Yah, but no Christmast money for me :-(

But that frees up R1500 per month for me and got a 30% discount for settling it, so it was worth settling.

Feel like i can move forward again, it is like walking with a knife in your back for long time and suddenly somebody pulls it out and you realize
the pain is gone. haha

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## GeorgeSA

"The best advice is to only buy for cash- and do without" - That is not good advice... Reason I say so is that most of these people who borrow money from micro lenders are in a tight fix and need the money urgently. I doubt that anyone who wanted to buy an ipad or something for example would take out these high cost payday loans. They are aimed at people who have R0.00 in there bank account and need to buy baby food or something like that. 

The best advice I can give is if you find yourself in that situation don't panic and borrow money from the first people that will give it to you - shop around for the best deal and also don't borrow the money for the full term they want you to (e.g. if they say you can borrow R2000 for 31 days and you know you get paid in 5 days - ask them to take the loan for 5 days, or maybe 7 days just to be safe - That will greatly reduce the amount of interest they charge you.

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## polpak

Noticed in todays LexisNexis reporting:  Britain curbs payday lenders; Ceiling on fees and rates to cut industry's revenue by £420 million a year  

---extract-start---

The financial regulator imposed a limit on interest and fees starting next year. Among other rules, the cost of any loan may not exceed the amount borrowed.

British regulators said Tuesday that they would cap the fees and interest that payday lenders could charge for short-term loans.

The restrictions, which take effect in January, come after an outcry in Britain in the past year over the practices of such lenders. The loans get their nickname because the customers tend to be people who need to borrow money between paychecks and repay the loans on the next payday. They are often willing to pay the high interest rates and fees demanded because banks will not lend to them in such small amounts on a short-term basis.

---extract-end--- 


Article perhaps easier to view report: 

http://www.independent.co.uk/money/l...s-9601473.html

To find a solution that allows legitimate lenders to continue their business while curbing the excesses that penalise vulnerable people.


The problem occurs anywhere the legislation enables it to occur...

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## Dave A

> The problem occurs anywhere the legislation enables it to occur...


Theoretically the National Credit Act has controls and caps in place even stronger than those being proposed in the UK. It still hasn't stopped the problem.

Combination of things, I guess. The informal sector, by definition, operates outside of formal mechanisms. And of course the big one - a market that will buy the product despite the obvious pitfalls.

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## polpak

Yes,  while those who go outside the law, reduce their protections from the law.

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