In an era where even the government is knee deep in loans, Kenyans should begin to prioritize their reasons for getting loans. This is after a Central bank of Kenya survey revealed that most individuals took up loans to finance their holidays, especially at the end of the year.
The tendencies to rely on loans for provision has taken a toll on Kenya. Moreover, the onset of mobile money loaning applications have only worsened the situation. So much so that studies have shown how dependent they have become, even to a point of prisoners. This is due to the allure of real time loan application which does not require any collateral, unlike the traditional banks and loaning agencies.
On the other hand, those taking loans from the mobile applications are doing so to place bets. What, with the betting craze that is promoted in Kenya especially in football and the infamous Lotto Lottery respectively. And that’s where the issue stems in; not knowing when NOT to take a loan. What most people are not privy to is the fact that when taken for the right reasons, loans often end up benefiting an individual.
Loans for business
When considering getting a loan, one should ensure the money will bring returns for example in business. This, however, only applies if the business is viable. Furthermore, you should have a proper business plan detailing how the loan will add value to the business. In essence, value should be created for every coin invested into the business so as to allow generation of revenue. This, in turn, will allow for the repayment of the interest and principal of the loan.
In some situations, it is wise to take a loan to cover small debts. This, according to experts, is because one big loan is better than several small loans. I may not know how that one works, but it seems a viable option as well. However, it is also not advisable to make it a habit. One does not pay a debt by getting into another one. And in this case, especially not in betting.
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