Loan Sharks-A Menace in Zimbabwe … Continue to rip off borrowers despite the lockdown
12 May 2020
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By Own Correspondent| Ruling ZANU PF Politically linked loan sharks have continued to wreak havoc in Zimbabwe despite the on-going COVID-19 induced country lockdown which has prevented some honest borrowers from servicing their debts.

This publication has learnt that violent loan sharks which are mostly appendages of ZANU PF have taken advantage of people who have defaulted to pay back their loans as a result of the lockdown to violently strip the borrowers off their properties which includes farms and houses.

According to analysts, borrowers are also failing to meet their debt obligations owing to sluggish economic activity and a choking liquidity crisis as the country still lingers in the doldrums of economic instability. Businesses have also failed to restructure to reflect the new hyper inflationary environment.

Most firms and individuals have failed to take a paradigm shift in managing their financial affairs as a result. Loans have been largely short-term as original money lenders such as banks seek to minimize the risk of default and this means the credit facilities mature way before a business cycle is complete, resulting in defaults.

As a result, these mafia type ZANU PF linked cartel of loan sharks have taken advantage of this anomaly to extended loans at a very high risk without impunity as they are politically connected, and can even kill in a bid to make sure that they have it their own way. Therefore, the rate at which companies and individuals alike are failing to pay back debts is astronomical.

In Zimbabwe, loan sharks often operate often divorced from money lending laws of the country, charge very high interest rates and don’t give much paperwork to confirm the arrangements they’ve made with the borrowers as a result of their political muscle.

Loan sharks have largely been allowed by the skewed laws of the land to go scot free after stripping their borrowers of their hard earned properties as a result of their political connections which have direct parentage and lineage of the ruling party.

In other jurisdictions, an unauthorised lender such as a loan shark has no legal right to recover the debt. In fact, illegal loan sharks have no legal right to make the borrower pay the loan back at all – because the loan is illegal