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Consumer council urges financial discipline


The Consumer Council of Zimbabwe (CCZ) says there is need for consumers to exercise “extreme caution” when applying for loans and buying goods on credit as they might end up being caught up in a debt cycle.

CCZ executive director, Rosemary Siyachitema said while the loans provided temporary relief, consumers should always be aware that they still have the responsibility to repay the loans with interest.

“Long queues outside microfinance houses are an indication of poor salaries that most employees are getting,” said Siyachitema.

On average most workers earn below $200 per month far below the CCZ food poverty line (FPL) estimated at $500 a month.

FPL represents the minimum consumption expenditure necessary to ensure that each household member can consume a minimum food basket representing 2 100 kilocalories.

An individual whose total consumption expenditure does not exceed the FPL is deemed to be very poor.

Siyachitema said CCZ had noticed the worrying development of long queues outside most microfinance companies in the central business district since the beginning of January.

She said this was indicative of over-spending during the festive season hence the need for bridging finance to pay school fees.

Several consumers interviewed by NewsDay during the course of the week said they were in need of loans to pay school fees, among other pressing needs.

“We are looking for money for school fees,” Tendekai Mutoko who spoke to NewsDay while in a queue at one of the microfinance houses in the city.

Most of the microfinance houses surveyed in the city are charging interest rates as high as 30% per month.

Turning to the reintroduction of hire purchase by most shops that sell household goods, Siyachitema said

“We have seen the introduction of credit accounts this seems to be worsening the burden on consumers as most are tempted to live beyond their means.

“People have to learn to live according to their means. Consumers should have a priority list and need to remain financially disciplined,” said Siyachitema.

In most countries hire purchase is a common way of paying for major items, such as cars, furniture and computers.

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