Loan Sharks Milk Desperate Civil Servants Dry

Thousands of Zimbabwean civil servants have fallen into crippling debt, trapped by loan sharks allegedly working with the Salary Service Bureau (SSB) to deduct repayments directly from their salaries.

Many workers, about US$250 a month compared to US$550 in 2018, are forced to borrow at exorbitant rates, leaving them in a constant debt cycle.

Some have even surrendered their bank cards to lenders, who withdraw their salaries each month.

Many of these lenders operate within powerful networks, including senior government officials, and are exploiting the economic hardship facing civil servants.

Zimbabwe Confederation of Public Sector Trade Unions (ZCPSTU) Secretary-General David Dzatsunga warned that loan sharks, both licensed and illicit, are circling desperate government workers, whom they regard as “low-hanging fruit.”

He explained that some registered lenders have found ways of tapping directly into SSB systems, giving them easy access to struggling civil servants whose meagre earnings cannot keep pace with Zimbabwe’s soaring cost of living.

Dzatsunga said many public workers are being mercilessly exploited, shackled in a debt cycle from which they are finding it almost impossible to break free. Said Dzatsunga:

“These loan shacks are registered through the normal registration process of financial institutions, that is the Reserve Bank of Zimbabwe (RBZ), which enables them to have access to the SSB facility.

“Civil servants are the preferred clients of these operating loan sharks. They can only be doing that because civil servants are a low hanging fruit when it comes to loan sharks because they have a guaranteed income, although that income is quite little; loan sharks will then get the little US$200 or $300 that civil servants earn.

“We have been talking about this at the levels of the union that really this is a symptom of the effects of these slave wages that our members are getting that then drive them into borrowing from loan sharks and being sucked in a cycle of debt.”

More: Business Times

Related:

Rights, Rhetoric, And The State’s Responsibility: A Response To The Minister Of Education’s Utterances The Constitutionality Of Classroom Barriers: A Response To the Minister’s Directive On Debt Collectors