A lot of people look at their peers abroad and envy their lifestyles. Just know A lot of these things you see on social media are debt ridden. I remember @luoamerican chieth used to really disturb on these threads. Don’t fret my vumbistanians… Ni chocha Tu!
I’m not wrong to say that a lot of assets in Africa are financed by cash which IMO gives a lot of pride of ownership. It also cultivates saving culture and deferred gratification, something the West is not accustomed to.
Ill give you a good example. You have Luopean Njenga in Texas who bought a Ram 2500 in 2019 for $80K through financing and he currently owes $69K. In 2022, he feels that he needs something new, some of those gimmick features like a bigger touch pad, Lane departure, hands free driving, tow assist that were not in the 2019 truck. The 2022 truck costs $95K.
He goes to the dealership and they offer him $59K for his 2019 truck which means he is $10K in the hole. This $10K is rolled into the new vehicle and he would then owe $105K on financing.
So a $69K car loan has now ballooned to $105K. All he needs to do is put the signature on the dotted line. It takes anything from a few hours to a day maximum to get this through as long as he has proof of income.
Meanwhile while in Kenya visiting , Njenga is giving people motivation speeches of how hard he’s worked in the US not knowing he’ll be paying that car loan until his 3 year old is in University.
That is how subprime mortgage lending happened. A lot of people are getting into cars they cannot afford. For cars, the criteria is even less stringent because the vehicles are easily repossessed and resold at a profit.
Nowadays they offer loans of more than 36 months for a car note. Yaani utakuwa slave wa hiyo gari even 72 months. At the end of the loan gari ya 50k dollars umelipia 100k. True story. If your not carefule kule majuu unajipata una finace gari, simu, tv, viti hadi kitanda. System ingine if your not careful utakuwa slave wa bills. Better hapa vumbistan things are not yet exaggerated on prices. Though system is catching up for example CRB as opposed to Credit report system majuu
Tuwache kuuziana uoga. Debt inly become problematic of you let it rise to unmanageable levels. Trying to portray debt as inherently bad ain’t right. Hio ni wews so I don’t really see why you should desperately try to project the same on everyone. It is really difficult to get ahead in this country on cash basis unless unaiba. Just look around.
A recent GOBankingRates survey found that:
30% of Americans have between $1,001 and $5,000 in credit card debt
15% have $5,001 or more in credit card debt
6% have more than $10,000 in credit card debt.
15% of Americans Have Been in Credit Card Debt for 15 Years
55% of people carry a credit card balance from month to month (they do not pay in full monthly). 40% haven’t been credit card debt-free since before 2018
5% have had credit card debt since before 2006
The average American is living beyond their means and has credit card debt
The average person is bad with money
How do you become credit worthy by avoiding loans? Problem is that most Kenyans are in jobs that dont have security so their risk appetite is very low…they are worried if they take loans how will they pay