The Founder and Managing Director of Jijenge Credit, Kenya’s leading credit only microfinance, Peter Macharia Kamau has taken a moment to advice us on the importance of financial literacy.
In a panel discussion at the Kenya Broadcasting corporation, Mr Peter Macharia Kamau had this to say on impulse borrowing.
“Impulse borrowing is closely related to what we call impulse buying. It’s the action of engaging in borrowing without any plan, budget or vision as to where one intends to take the money. And it’s a very big challenge because you end up making the wrong decision, and when it comes to repayment you might go through very turbulent times.”
Impulse borrowing is usually motivated by friends, peers, offers to engage in cheap or quick deals and sometimes it maybe, as much as you are borrowing and there’s a sort of cost implication on the funds you have acquired it might not look cheap on the flip side.
It calls for a lot of personal financial discipline, a lot of research, consultation, and doing something we call in the academic world a SWOT analysis. Do you really need to purchase or incur that cost at that particular time?”