24 Mar 2021

The option to guarantee pension could be beneficial, especially in the event of untimely death, the managing director of Money Matters, Ms Edna Dambe has said.

In her presentation at a financial inclusion workshop in Ghanzi recently, Ms Dambe said it was important to appreciate the ages of dependents and to put in place a guarantee on pension when one retired as it could continue beyond the death of a member, albeit within the guaranteed period.

She said loan top ups was a dangerous way of dealing with finances because it converted installment credit into revolving credit, resulting in failure to pay  simple loans. She explained that a loan top up would make one slip into the next loan seamlessly and never get a break from paying fresh loans.

“You will clear the old loan, but you will remain indebted in the same way,” she said, adding that the habit of resorting to a top up loan was tantamount to converting a loan into a wallet.

Ms Dambe also said a loan without retrenchment cover was no good, and also cautioned Batswana to avoid consolidating consumption debt into appreciation assert.

“It is counter productive to take home equity release or take a loan against a paid up house to clear a consumption debt because statistically you stand 80 per cent chance of losing that property,” she said. Banking Ombudsman, Dr Gabriel Maotonyane underscored the need to read and understand contracts when borrowing money, and to never neglect the responsibility to repay loans and the accrued interest.The workshop was organised by the Competition and Consumer Authority. ENDS