I am not a MFI, just a moneylender

Both my savings and loan repayment schemes with my neighbourhood fruit-seller hit a snag after two rounds of repayment, a few months back. She had repaid 20 out of my 50 cedis over a couple of months. Then one day, she offered to give me mangoes for free, saying that she would never be able to repay the entire loan in cash. There had been a couple of unexpected deaths in the family and with funeral expenses etc, she was in a tight spot. 

Instinctively, I denied, thinking it might be exploitative of me to be doing so. Perhaps I was wrong – it could have been a painless way for her to pay off her debt – a mango a day. But I rationalised with myself that if I took up her offer, I was forcing her into a daily transaction which she may start grudging soon after. That in turn could affect my personal relationship with her. What if I was her only customer on a given day (not entirely implausible)? Moreover, I really wanted to give her the choice of saving up again and deciding how she would pay me back. Not to mention that in such an arrangement, the burden of keeping records would be on me and that was a cost I was not prepared to take on. I also did not want to be locked into a system where I would feel obliged to pick something from her shop even if I didn’t want to. I of course wanted her to pay me back, but was comfortable allowing her a reasonable time period to do so – and of course, I was aware that by doing this, I was running the risk of never being fully repaid.

At that point, I could be either a MFI or a moneylender. If I chose to be a MFI, I probably would not have the flexibility of offering her a moratorium on her loan to help her tide over. I probably would also not have the luxury of placing my personal relationship with her on par with my stake in getting my money back – what with equity investors and term loans on my back! As a money lender instead, I could do as I wished – it was my capital. I could give her a moratorium on her loan – and that is exactly what I did. I told her that it was okay for her to resume paying me back later, when things were better – effectively, I gave her a grace period of no repayment until her cash flows stabilised. My reward then was the look on her face and her smile when she realised I was not going to come claiming my free mango every evening. 

Today – a few months hence – I raised the matter of the remaining 30 cedis. She has been doing good business over the last few weeks and I thought it was an appropriate time to remind her. And she promised she would try to return at least 20 cedis. I leave Ghana in about three weeks – in the end, it may not be enough time for me to collect all my money back. Whatever…


Writing this down makes me wonder – how would she have narrated this? I don’t want to guess. The story could sound entirely different…or not!

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