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Zimbabwe civil servants falling prey to loan sharks
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Thousands of Zimbabwean civil servants are falling prey to loan sharks, with some operating through the Salary Service Bureau (SSB) to directly access workers' salaries. A recent survey by Business Times revealed that many civil servants are caught in a cycle of borrowing at exorbitant interest rates, leaving them financially crippled.
The survey found that thousands of workers have handed over their bank cards to these lenders, allowing automatic monthly deductions to service loans. Borrowing has increasingly become the norm, driven by a struggling economy and salaries that have plummeted from US$550 in 2018 to less than US$250 today.
Zimbabwe Confederation of Public Sector Trade Unions (ZCPSTU) Secretary-General David Dzatsunga said loan sharks, both registered and unregistered, are exploiting civil servants who are viewed as "low-hanging fruit." He explained that many registered lenders have access to SSB facilities, giving them a direct channel to collect repayments from government employees.
"Civil servants are the preferred clients because they have guaranteed income, albeit very little," Dzatsunga said. "These workers become trapped in a debt cycle due to pressing needs like school fees, medical bills, and other living expenses. Once they are sucked into these high-interest loans, it's almost impossible to escape."
Obert Masaraure, president of the Amalgamated Rural Teachers Union of Zimbabwe (ARTUZ), said currency conversion and salary reductions have left civil servants with unsustainable incomes. "Over 90% of Zimbabwean civil servants are carrying non-sustainable debt because of drastic salary reductions since 2018. Many have resorted to borrowing from anyone willing, including loan sharks, when banks would not approve their applications," Masaraure said.
Masaraure called on the government to intervene, suggesting models from neighbouring countries such as Zambia, where the state assumed and settled public servant debts to alleviate the crisis. He emphasized that until the debt problem is addressed, productivity and purchasing power among civil servants will remain severely limited.
The situation highlights the urgent need for structural reforms to protect public workers from predatory lenders and address the broader economic challenges affecting their livelihoods.
The survey found that thousands of workers have handed over their bank cards to these lenders, allowing automatic monthly deductions to service loans. Borrowing has increasingly become the norm, driven by a struggling economy and salaries that have plummeted from US$550 in 2018 to less than US$250 today.
Zimbabwe Confederation of Public Sector Trade Unions (ZCPSTU) Secretary-General David Dzatsunga said loan sharks, both registered and unregistered, are exploiting civil servants who are viewed as "low-hanging fruit." He explained that many registered lenders have access to SSB facilities, giving them a direct channel to collect repayments from government employees.
"Civil servants are the preferred clients because they have guaranteed income, albeit very little," Dzatsunga said. "These workers become trapped in a debt cycle due to pressing needs like school fees, medical bills, and other living expenses. Once they are sucked into these high-interest loans, it's almost impossible to escape."
Obert Masaraure, president of the Amalgamated Rural Teachers Union of Zimbabwe (ARTUZ), said currency conversion and salary reductions have left civil servants with unsustainable incomes. "Over 90% of Zimbabwean civil servants are carrying non-sustainable debt because of drastic salary reductions since 2018. Many have resorted to borrowing from anyone willing, including loan sharks, when banks would not approve their applications," Masaraure said.
Masaraure called on the government to intervene, suggesting models from neighbouring countries such as Zambia, where the state assumed and settled public servant debts to alleviate the crisis. He emphasized that until the debt problem is addressed, productivity and purchasing power among civil servants will remain severely limited.
The situation highlights the urgent need for structural reforms to protect public workers from predatory lenders and address the broader economic challenges affecting their livelihoods.
Source - Business Times
