Chronicles of Borrowing
Although it seems like all I read these days is about the Elections in Nigeria, I have found the time to follow this month’s theme on borrowing. The reason why I have read every post this month religiously is that I also have my share of the high and lows of borrowing.
At one point in my life I decided to go into business to support my family, I didn’t want to go look for a 9-5 job because of my spouse’s vocation, I needed the freedom of a business to support him at any time he required.
After thinking through what I wanted to do, I decided to go into farming but needed capital. I was able to acquire 4 plots of farmland through the financial help from a friend. Since I could not get any f further funds from my family, I had only the financial institutions left to go to get the required money.
Commercial banks were out of it because of their high-interest rate and required collateral. I initially opted for a cooperative society but failed to meet their requirements to receive a loan. They gave loans to only members whose membership was at least six months old and had saved one-third of the money they wanted to borrow with an interest rate of 10%.
I eventually got the first loan(half a million naira to be repaid in 6 months) from a microfinance bank with an interest rate similar to that of the cooperative society. I used a building worth much more than 10 times the loan I wanted for collateral and had my two guarantors each sign three post-dated cheques covering the whole amount in case I defaulted. I eventually also got one million five hundred thousand naira from the cooperative society ( to be repaid in 10 months) and invested all of these into a piggery.
I knew challenges would arise but the challenges that came quite overwhelmed me .Firstly, the land I got was very rocky so I spent more than budgeted for in trying to get a borehole dug but was unsuccessful. I resorted to buying and storing water using a tank.
Secondly, there was also the high mortality rate among the pigs. This was caused firstly by pigs eating their newborn piglets after delivering especially at night , when they were unsupervised. There was a case of a particular pig who had 10 piglets twice and none survived so I had to sell that pig. Secondly, I wrongly allowed pigs from the same family to mate but their offspring were usually defective dying prematurely or having stunted growth.
Thirdly, I experienced security challenges that I was unable to solve even with the use of security guards. The community where the piggery was located became hostile. They had an issue with the smell of the pigs and some scoundrels killed some of the pigs in farms in the area directly while they sometimes poisoned the pigs, causing me great loss.
The return on investment wasn’t immediate but the repayment of the loan was immediate. This put a lot of strain on me emotionally and financially and that was when the drama began as I couldn’t meet up with the payments occasionally.
On one occasion while taking my children to school, the bank officials trailed me to the school and started harassing me. It wasn’t funny and another time they came to my house but I walked them out because it wasn’t yet the due date for me to pay. I always called before the due date every time I knew I would be unable to make the payment but that did not stop the harassment.
Before I went to these other institutions, I had started processing a loan of one million naira from the Bank of Agriculture(BOA)but it wasn’t forthcoming so with the stress from these two, I started following up on BOA, finally, after two years I got the loan. Unlike the first two lenders, BOA gave me a moratorium of six months. Since I had finished paying the microfinance loan and used part of BOA funds to offset the cooperative loan which I completed after a few months I applied again to the Cooperative bank and got another loan of two million naira.I then expanded into poultry and also started breeding dogs which was very lucrative, helping to offset the loans.
Then we had to relocate and I shut down the piggery and the poultry. This was when the real hassling started, I couldn’t meet up at all in repaying back the loan to the bank or the cooperative. I couldn’t continue with the piggery and poultry in my new abode, so I didn’t have any source of income. After a while, my husband raised some money for me which I invested in another venture but lost about 2 million naira.
Borrowing wasn’t something I ever thought I would be involved with but as an entrepreneur, I also have to take risks. The path has been tortuous but I have made some progress.
I was able to repay the Agriculture bank loan after more than two years with additional interest for default. However, I am still struggling to pay back the cooperative loan because the business I am involved in presently is not as lucrative as the piggery business in which the sale of one pig usually covered a chunk of the repayment money.
Borrowing isn’t for the faint-hearted, I know the tremendous pressure and health challenges I have been in the last 12 months. Sometimes I cry for days without end, thinking endlessly on how to get out of debt. Then I also resorted to prayer, continuously, always hoping that things would get better.
If you have no solid business plan(always have a plan B), please do not borrow from any institution. Always allocate a salary to yourself and enforce the discipline of saving (it was one of my greatest undoings) while making sure there are regular repayments of the loan.
In spite of all I have been through, I will do it all over.
