05 Feb 2020

The justice system is inundated with household debt recovery cases arising from inability of a significant number of persons to service their debts, Attorney General Advocate Abraham Keetshabe has said. 

Speaking at the official opening of the 2020 legal year on February 4, Mr Keetshabe said courts were bunged with debt collection cases. 

“From the lowest ranked customary court, through to the small claims court, up to the highest court in the land, there is stiff competition for space and time to have such cases heard and resolved within the shortest possible time,” he said.

He said Bank of Botswana statistics indicated that commercial bank loans to the household sector grew at high rates citing 2019 where they accounted for a larger proportion of bank credit at 63. 3 per cent (approximately P40 billion). 

Advocate Keetshabe said unsecured loans constituted 68 per cent while mortgages and motor vehicle loans accounted for 25 per cent and five per cent respectively. 

Meanwhile, he said household credit from micro-lenders was estimated at P3.6 billion as at November 30, 2019.

Given the expensive nature of such credit, unsecured loans and advances had the potential to cause financial distress and conflicts in households, he said. 

The attorney general said the bulk of the household credit was to salaried individuals as their monthly earnings enabled proper credit evaluation and income was used as the basis for determining repayment capacity. 

He further said it was clear there were many and varied instances of inadequate financial planning and evaluation of prospects for borrowing as well as over-borrowing through the use of multiple institutions and padding of income sources, leading to inability to pay. 

 Faced with such eventualities, Mr Keetshabe said lenders resorted to the courts to enforce repayment. 

“It so happens that this takes up a significant amount of court time and resources,” he said.

He said there was a beehive of activity in the issuance of writs of execution and subsequent attachment and sale of property  by deputy sheriffs. 

Although there was inherently nothing wrong with borrowing, the attorney general said it was important for people to assess their needs and avoid the temptation to gratify  themselves with earthly riches and wonders.

In the public sector, he said, financial embarrassment was seen as potential impairment to efficiency and therefore regarded as gross misconduct.

 Advocate Keetshabe said there was need to continuously promote financial literacy and discipline, with a view to unclogging the justice system and liberating the gullible from endorsing their poor judgement. ENDS