John thought that he finished paying his loan, so he started planning to borrow a larger amount to invest in machinery for his welding business. After asking a loan officer for a loan application form, John was told that he was not finished paying his current loan. His loan repayment period was another two months.
When John could not present his receipts that are issued for each loan payment, the loan officer told him that it was not her responsibility to keep track of his loan payments. John continued to pay his loan for another two months because he felt obligated since he did not keep any records or receipts of his past loan payments.
John plans to be more responsible during his next loan period by keeping track of his loan payments and maintaining his receipts.
What can borrowers learn from this story?
Consumer rights do not exist without consumer obligations. Consumers have responsibilities while participating in the financial sector that they have to follow in order to enjoy their rights.
How did this story contribute to the manual?
In the manual, there is a section that describes some of the most important rights for financial consumers in Kenya, including the right to consumer education, the right to be informed, and the right to redress and to be heard. But, it is important to keep in mind that consumers also have responsibilities, one of which is described in the story of John. Consumers need to be proactive in their participation in the financial sector by accepting the following responsibilities. Only then can borrowers understand the investment and risk of lending that will allow each to make beneficial financial decisions.
Remember as a financial consumer, you have the...
Responsibility to choose for yourself what financial services to use.
Responsibility to be critical in questioning or asking for information.
Responsibility to understand loan agreements.
Responsibility to comply with or honor loan agreements.
Responsibility to evaluate the costs of financial products before making any decisions.
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