ʜɪɢʜʟɪɢʜᴛɪɴɢ ᴍᴀᴊᴏʀ ᴄᴀᴜsᴇ ᴏғ ғɪɴᴀɴᴄɪᴀʟ ᴄʀɪsɪs ᴀɴᴅ ɪᴍᴍᴇɴsᴇ ᴘᴏᴠᴇʀᴛʏ

One of the reasons why people struggle with intense poverty is as a result of lack of financial management. There are few ways that are mostly common in effectively achieving financial management is to keep the records of your finances, which includes your expenses, budgets and ensuring your debit rate is not above the amount you earn. Which seems quite simple as long as you can adhere to the rules of cutting your coat according to your size. Not everyone has the inbuilt drive to save for raining days due to a lot of reasons probably because their earnings is not capable of catering for their lifestyle or they spend more they earn.

Which ever way it might seem, I believe no matter how poor a person's saving habit is, one thing every individual needs to ensure is to make sure they don't venture into debt or depend on loan for survival, the effect of depending on loan for survival is immense poverty or lack of financial stability. There are different reasons for seeking out loan e.g business and personal needs. For business reasons as long as you have a genuine and well calculated business plan to use the money for I believe it is ok as long as the interest is not too burdensome though profits and success of the business are not guaranteed, it all depends on how creative such an individual is.

Apart from business related reasons people also seek out loan for personal reasons e.g for clothing, transportation, accommodation, party, feeding e.t.c this are basic life necessities but are they worthy of seeking out loan for? I have seen cases whereby couples seek out loan to finance their wedding ceremonies to suit their taste but at the long run when the whole party is over they find themselves struggling to pay back the loan. They are some parties that generates funds such as wedding ceremonies but it is not guaranteed. When it comes to applying for loan, securing a means of payment is very important. You must have drafted out a logical and reasonable means to pay back the loan before applying for the loan.*

What I have realised and come to understand from studying people is that, they will make all kind of promises just to secure a loan and the most funny aspect of it is that most of this promises are based on fantasies and speculations. Probably they believe when they get the loan they will surely find a way to pay it back but it doesn't work like that. You might be lucky to find someone to help you out but is it guaranteed? to the extent that they find themselves borrowing money from other sources to pay back an unpaid loan creating an endless circle of being in debt. Which could have been avoided if they had a solid plan to pay back the loan. You can have more than 50 achievable ways planned just to ensure that you pay back the loan.

Over the years I have seen a lot of people depend on mobile apps for loans because it is fast in granting loan request and the requirement process is less rigid unlike commercial banks that seeks for a lot documents just to ensure whoever is seeking for a loan has a means to pay back but there are some commercial banks that also grants easy loan on their bank mobile app. Here is the issue, majority of this loan granting apps have high loan interest and the moment some people are seeking for a loan they become blinded by the desperation of what they need the loan for to the extent that they pay little or no attention to the interest of the loan, which also includes the loan agreement some people don't read it at all. At the long run when the time for paying back the loan comes, they realise they are not capable of paying back the amount requested.

You might not have noticed but the moment you find yourself seeking a loan to pay a loan it becomes an attitude of yours to seek for loan. It can become an addiction that you might not be aware of, this is why you see some people swimming in debts and you wonder what exactly did you use the loan you requested for to do. Such people barely have something to save up because they are jumping from one loan app to another.

I witnessed an irregular situation last year, a telecommunication company in Nigeria known as MTN had a network glitch, which caused the debit owed by their subscribers to disappear as if they never owe any money in the first place. Immediately some Nigerians realised this, they took to their social media page to let out their excitement but this is not really the issue.

The issue was that immediately some people realised their debt has been erased they started borrowing more airtime believing the former debt has been cancelled, though at that moment they had no idea that it was a network glitch, until it was announced on MTN different social media platforms that it was as a result of a network glitch and the issue will be resolved. Which means the debt people think has disappeared will reappear since it was never paid in the first place. I was not excited by the network glitch because I never owe MTN any airtime in the first place.

The moment people heard that their former debts will reappear, they got upset and started ranting on social media that the network glitch was a plot or strategy deployed by the telecommunication Company known as MTN to manipulate users and also influence them into acquiring more debt. I thought about it for hours but it did not make any sense to me. Lets say their accusation towards MTN was true but *were they forced to borrow more airtime? it was not as if the network provider instructed them to acquire more debt, they did it on their own accord.

Thinking of this made me realise that the major reason why people struggle with financial instability is acquisition of debt, I mean for a reasonable person, even if you feel your debt was cleared, isn't that the opportunity to be free and stay away from debts but for someone who is addicted to acquiring debts such person will see it as an opportunity to acquire more debts. Isn't that concerning? it is quite disheartening to see people take issues of debt so softly without knowing it is the reason behind their lack of savings and intense poverty.

_{This write-up was inspired by weekly featured content titled "Financial literacy" in hive learners community.}

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