Borrowing to Survive: The Case of Many in the Mashare Constituency
Local officials in Namibia's Mashare Constituency are raising alarms over a cycle of debt trapping households in poverty. The government is investigating the need for better financial regulation and education to protect citizens from predatory lending.
Why it matters
The issue highlights the intersection of economic hardship, lack of financial literacy, and the need for consumer protection in developing economies.
Mashare Constituency Councillor, Peter Kashumali has warned that the growing debt burden is trapping households in a cycle of borrowing, refinancing and taking new loans to settle existing debts.
“You go to location A, you take. You go to location B, you take. You go to location C, you take,” Kashumali said.
The remarks were made during public hearings by the National Assembly Standing Committee on Economy, Industry, Public Administration and Planning in Kavango East on Wednesday.
He said some borrowers eventually reach Location D and beyond, taking additional loans to pay interest on previous debts.
Kashumali said the situation is worsened by rising living costs, low incomes and the ease with which people can access loans, particularly from lenders who do not properly assess affordability.
He rejected the view that salary increases alone would solve the problem, saying people also need to be taught how to manage their income.
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