Last week, we did a brief talk on money and saving at some a firm in Industrial Area and spoke to some technical workers. When I was done, I left my cellphone number, as I always do, and on Saturday night, I got called by a guy who we’ll call Ben. Ben told me the following story:
6 months ago, his son had been taken severely ill, and had to be rushed to hospital. He was admitted and required some surgery. Unfortunately, Ben didn’t have the money to pay for his son’s treatment at the time and he had borrowed the money from the only readily available source which was a neighbourhood Shylock. The shylock had told Ben that he would pay 20% interest and he could pay back the money in monthly installments. What Ben didn’t realize was that that the 20% interest was charged per month on the outstanding balance. Ben borrowed KES 40,000 which barely covered the expenses for his son’s treatment and started paying back the money with all that he could spare which was KES 5,000 per month.
At 20% per month, after the initial payment, Ben’s outstanding balance was KES 43,000 which was the original KES 40,000 plus KES 8,000 interest less the payment of KES 5,000. After 6 months, Ben owed the Shylock in excess of KES 70,000 and this was still growing. When I met Ben, he was stressed, had lost weight and his friends told me that he was withdrawn and moody. He told me he had lost all ability to concentrate at work, was worried that he would get fired and his wife was threatening to leave him, since all they did was fight. Ben had started drinking and at one time he had thought of commiting suicide or running away from work, and leaving the country. His HR manager confirmed that his work had deteriorated to a point that they had discussed firing him.
One of the saddest things about this story is that the company Ben works for has very good medical insurance for its workers and their children. Ben didn’t know that, and a lot of his co workers didn’t either. Those that knew about it didn’t know what it meant and how to use it. They told me when they fell sick, they just paid for treatment in the neighbourhood clinics.
As I listened to the guys speaking, I imagined situations where, while distracted, Ben might do poor work on a customer’s car and get the firm sued, or injure himself on a lathe or with a drill and cos the firm millions in Workman’s compensation.
Without going too far, the story above reinforced our belief that financial education in the workplace should be made mandatory. We all want to employ people with great academic qualifications, but what about their ability to manage money? People in financial distress are not only unproductive – worrying about money-but they are also a risk to the business. They are more likely to take bribes, embezzle and get into illegal deals trying to get out debt.
As for Ben, his HR manager is helping him out. They are trying to get the insurance company to refund the money spent, and are speaking to the Shylock as well. Lets wish them luck.