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HFC Bank moves to free those caught in money lending cycle

Government and in particular, the Minister for Finance Aiyaz Sayed-Khaiyum, have constantly highlighted the vicious cycle of money lending many Fijians are caught up in. It seems the harder these
23 Jan 2016 10:30
HFC Bank moves to free those caught in money lending cycle

Government and in particular, the Minister for Finance Aiyaz Sayed-Khaiyum, have constantly highlighted the vicious cycle of money lending many Fijians are caught up in.

It seems the harder these people try to break away from this cycle, the deeper they get into it because of the high interest rates money lenders require.

The locally-owned HFC Bank is working towards helping free Fijians trapped in this pay day-to-pay day cycle. It has launched 2016 as the year of “Breaking Away from the Vicious Money Lending Cycle”.

HFC Bank Treasurer, Peter Fuata, said one can get a loan from HFC to pay off their existing debt with the money lender.

“The repayments are then channelled into their savings. Conclusively approximately the 20 per cent or so that was being paid to the money lender is now theirs,” he said.

“The key ingredient in this is honesty by disclosing all your debts, making a commitment with HFC Bank and pursuing your dreams.”

But Mr Fuata stressed they are not selling products rather they are selling a genuine intention to help and by default, a saving culture.

“Thus for example a loan is either secured or unsecured. All Banks sell this,” he said.

“However, at HFC Bank, we have drilled down unsecured loans as an example of a product that can help all Fijians consolidate all their debt.

“This means less interest cost and more cash in our pockets or savings.”

Mr Fuata said in Fiji, unplanned or unaffordable desires are borrowed for.

“These are the main reasons attributed to over borrowing and then it’s to the money lenders in which people are stuck with at pay day to pay day,” he said.

“So Financial Literacy is ones financial discipline with money.”

Sun INTERVIEW – Peter Fuata-HFC Bank Treasurer

What sort of change do you hope to bring about with this scheme?

A savings culture. Needless to say that it’s not a new theory. However, it’s a loud reminder that we need to put it in a local perspective.

Its monotonous these days to tell people to save, save, save. But if we say, don’t live your life from one “pay day” to “pay day”.

Don’t go and “kerekere” every time it’s a loved one’s life time occasion. Then I suppose that’s more meaningful.

Your ATM card is legally only for you and not a third party.

 

How many people would you say are trapped in the “vicious money lending cycle” and how serious is the issue?

The last paper that I know of was done by “Fiji Institute of Applied Studies” for the Consumer Council. So like all Pacific data they are lagging or are conducted every five or 10 years.

The 2007 findings were that 11 per cent of Households have used a money lender, thus statically its assumed that 11 per cent of households in Fiji use money lenders.
Now from the Bureau of Statistics there is an estimated 180,000 households. So mathematically, seven years ago approximately 20,000 families were affected.

In the same report, FICAC found 500 ATM cards at an unlicensed shop in the North. So if we took 500 cards and multiplied this by an estimated 2000 registered and unofficial money lenders it would be a staggering 1 million ATM cards.

Conclusively, sightings of many money lenders at ATM’s, in 2015-16 is a regular thing, thus more evidence.

 

What is the major factor these people get caught in this cycle?

It is simply because of a cultural flaw of not being able to say “No”. Even when we disagree we say “yes”, even when we can’t afford it we say “io” (iTaukei for yes)

Because this person is asking or because this family is asking we can’t say “No”.

 

How can we bring these people out of the cycle?

Speak to someone at HFC Bank or a reputable Bank. Call me and I’ll make an appointment for you at a HFC Bank nearest to you.

And tell them about all your debts and I mean all from Hire Purchase, Credit Union, Other Banks and Finance Institutions.

Feedback: rachnal@fijisun.com.fj

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