(First Published in New Era Newspaper - 24 September 2014)
The past few weeks I have been reminded about an old English
proverb/nursery rhyme that goes: “If wishes were horses, beggars would ride; If
turnips were watches, I'd wear one by my side; If, If's and And's were pots and
pans, there would be no need for tinkers.”
My grandfather often told me this while growing up and he
meant for me to understand that it is useless to wish on something as better
results will only be achieved through actions. Of course, I always had a dream
in my head and believed that one day my wish would turn into horse (and I also
thought the rhyme said thinkers rather than tinkers). The past few weeks one of
my wishes did become a horse: A small lump sum of money came to my wife and she
was able to invite me on a shopping spree. We started by purchasing all the
main furniture such as fridge, microwave, deep freezer, bed and matrass, as
well as completely new pots, pans, cutlery and the Russell Hobbs toaster and
kettle. We even had enough left over to buy that big screen television,
television decoder and the George Foreman grill. I have never understood
“retail therapy” but am now convinced this is an exercise that can really bring
pleasure as long as you do it with cash and not a credit purchase which creates
a monthly payment.
Yep you read it right, I suggest retail therapy or shop till
you drop – IF you can do it with cash in hand and not on credit.
After our purchases, it did a precursory look at the
furniture we bought and the monthly payments that we would have to pay if it
was bought on credit. If we had purchased for an amount of N$ 28 999, our
deposit would have been in the region of N$ 2,900 and our monthly payments
would have amounted to N$ 2,184 per month for 24 months. If you add this up,
our purchase would have cost us a total of N$ 55, 316. You should read that
again. We would be paying interest and other charges to the value of N$ 26,317.
That means if we had paid this over the normal 24 months we would be paying
almost double the value of the furniture. Phew. Finance charges are expensive.
When we as consumers wish to purchase goods or products, we
often do not have the money readily available to pay for our goods in one go.
Therefore, retailers have come up with the concept of consumer credit which
means the creditor or seller trusts the consumer enough to provide us with the
goods and services we desire and expect us to pay off this amount at some time
in the future. In exchange for this service (which is in fact lending the consumer
money to buy from them), the supplier of credit is allowed to charge a certain
amount of interest on the amount they have lent to you as the consumer.
Governments (as well as religions) have recognised that the
consumer is at a distinct disadvantage as they are in the position of wanting,
and would probably do almost anything to get the product or service. The credit
supplier can in this case charge a very high rate that would in fact be
unethical or even be considered immoral. In cases like this, the term we use
for such practices is called USURY. The government, through the Namibian
Financial Institutions Supervisory Authority (NAMFISA) is the organisation
responsible for regulating these types of transactions. If you have purchased
any goods or services through a credit agreement and you feel that you might
have been overcharged when the interest and other charges are added, you should
contact the regulator and make your complaint heard.
