Humanist

Last Friday, 13^th March 2026, is when the topic of External Credit was discussed during our CPAR Uganda training of Self-Reliant Participatory Development Change Agents on Income Generation.

A discussion that turned out to consciously awaken us, the trainers, even the more about the disturbing status quo; but one which can be rectified.

On the same day, I happened upon an X post by Thuranira (@Thuranira_1), who describes self as an Advocate of the High Court of Kenya. In his post he narrated the case of one who borrowed Ksh. 400,000 (about Ush. 11.6 million) to buy a car priced Ksh. 700,000 (about Ush. 20.4 million).

I happened upon Thuranira’s post as the President of the Uganda Law Society, Isaac Ssemakadde, had shared it to his X profile. When I read it all, figurative light bulbs went on in my head. And I thought about those whom we tend to perceive as financially literate, but who turn out not to be.

Obviously, considering Thuranira is an advocate, the conversation on his X profile tended to gravitate towards the legislative environment that allowed the lenders to take advantage of the financial illiteracy of the borrower. Advice given tilted towards seeking legal advice before borrowing.

Me thinks though, that there needs to be a change of attitude towards this scourge of seemingly sensible persons, the elite, including the ‘learned’ making such financially illiterate damning decisions.

I am not saying the legislative environment doesn’t matter, it does; but there is a strong case to be made for the significant need there is for us all to take financial literacy seriously as a genuine need of our endowment.

I took the time to use the Cash Flow / Cash Book Accounting tool to map the borrower’s decisions over a three-year period, as they were described by Thuranira.

My mind was blown to bits by the jaw-dropping financially illiterate decisions the borrower made.

Contextualize that after the first year, the borrower had paid a cumulative amount of over Ush. 43.3 million for a car priced at about Ush. 20.4 million. And even then, the borrower still owed the lender a lot of money.

Long story short, ultimately, the borrower was not able to service the loan and the lender repossessed the car. But the borrower still had to clear the loan and interest accrued.

The borrower ended up paying a whopping total amount of about Ush. 87.3 million for a car priced at 20.4 million – over four times the price of the car. And while the borrower ended up with no car as well.

Make this make sense!

Yap, the loan made the borrower significantly poorer.

Poorer, not only financially, for I am inclined to believe that the quality of the borrower’s life was significantly poor during the period servicing the loan. The borrower must have been under significant mental stress and therefore mental ill-health.

It follows that his state of mental stress and ill-health likely also negatively manifested on the borrower’s household, wider family and friends.

The opportunity cost lost to the borrower is huge – all the things the borrower and loved ones could not do or afford, because finances had to be devoted to and diverted towards loan repayments.

It is not far fetched to apply this scenario to public debt, which affects us all as citizens of a nation. For example, it is feasible the ability or inability to deliver public services is determined by public debt.

Reality check, “Uganda’s debt rises to Shs131 trillion as questions of sustainability creep in.” Click here to read the URN story published on The Independent.

Food for thought indeed!

CONTENT OF THURANIRA’S POST: “You take a loan of KSh 400,000 to help buy a car worth KSh 700,000. You faithfully pay KSh 30,000 every month. After some time you have paid KSh 300,000. Unfortunately, you lose your job and miss one month’s payment. The microfinance repossesses your car and threatens to auction it. You plead with them. They tell you to pay KSh 150,000 to restructure the loan. You borrow from a shylock and pay. They restructure the loan. It is extended to 3 years. You now pay KSh 25,000 per month. You resume payments. You manage to pay for another year. Then things get tough again. By this time you have paid KSh 700,000 in total. Yet you still owe KSh 600,000. They repossess your car again. They value it at KSh 250,000 and sell it. You are left with a balance of KSh 350,000. Interest keeps accumulating. You take other loans to clear the KSh 350,000. In the end, the KSh 400,000 loan costs you almost KSh 3,000,000. You lose the car. You lose your peace of mind. Machoos.” Thuranira (@Thuranira_1) Advocate of the High Court of Kenya, Email: info@thuraniraadvocates.com, Tel.: +254 703 390 743