Why are the youth debt ridden?
2 months ago, 12 Oct 05:00
Once in a while, you will find yourself in a financial bind and request a friend or family to tide you over. Asking for a soft loan is quite normal.
Mobile loan apps make it even easier to borrow money when broke raids. Chances are you have interacted with such platforms, and even borrowed money from them.
Mobile loan apps are popular among the youth, and are making a killing. Unlike traditional lenders, these do not have tedious application processes. No paperwork is required. Besides, you need no guarantors or collateral. And the loan is instant. What could be more convenient and enticing!
Yet this is where the trap is. The loans are addictive, and can be a bondage. Today, millennials are debt-ridden, with some unable to service these loans.
Young people who shared their experiences with myNetwork tell us why they borrow money, their expenditure and the perils of such loans.
They all agree that the impressionable nature of millennials push them to borrow money that they do not need, and spend it on mostly liabilities in their quest for ‘acceptance’ in the society.
TRUSILLA MATUNDA, 23
Matunda is a communication and media studies graduate from Zetech University. She practised journalism for a year before trying her hand at modelling. She makes jewellery, gift cards and handmade décor items on the side.
Have you ever borrowed money from such platforms?
I dread being in debt but I just cannot avoid loan apps. Branch, Tala and Utunzi are the most popular apps in my circle of friends.
Are your reasons for borrowing money always compelling?
The need to borrow money for me is mostly influenced by wants rather than needs. I have occasionally had to borrow from friends and family to buy a dress, a pretty bag or a pair of shoes I had run into during my strolls in town.
There are even times when I would call someone to send me some money so that I can take a cab instead of matatu. These are things that I could forego, but I still convince myself that I must have them.
Have your friends ever influenced your financial decisions?
On numerous occasions I have bought an item or invested in a cause on grounds that my friends thought it was a great idea.
This always ended in disappointment after my financial status was thrown into disarray. As such, I have learnt to not involve them in planning for, and spending my money because this usually leads to misuse and regrets later.
How do you service your debt?
I mostly pay back from my income from different modelling gigs that I participate in. Proceeds from sale of my crafts also help me to put off any debts that I might have.
For fairly large amounts of money, I come up with a payment plan that works for both the lender and myself. We agree on the repayment period which reduces the pressure to pay back. Instalment plans are also easier to work with; than bulk repayment.
Have you ever defaulted in your loan ...
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