Household crisis drives Kaloba addiction among civil servants-Expert

Economic Expert Kelvin Chisanga has indicated that […]

Economic Expert Kelvin Chisanga has indicated that the growing use of Kaloba among civil servants is less about addiction to borrowing and more of a symptom caused by a deeper household liquidity crisis.

Speaking in an interview with Zambian Business Times-ZBT, Chisanga said workers are increasingly turning to short-term lenders because their salaries are heavily committed to formal loans, leaving them with little disposable income when emergencies arise.

“The growing use of Kaloba amongst civil servants is less about addiction to loans or a borrowing culture and more about a symptom of a deeper household liquidity crisis because when salaries are already heavily committed to formal loans, a worker can still face an immediate cash flow gap for food, school fees, medical expenses, transport, or other emergencies,” he said.

 Chisanga added that the difference between gross income and actual disposable income is pushing some civil servants towards informal credit because conventional lenders often assess existing debt obligations before approving additional loans.

 “The key issue is the difference between income on paper and disposable income in reality because a civil servant may have a reasonable gross salary, but after deductions from banks, mortgages, insurance, and other financial commitments, the amount reaching the household can be a small portion, and when an unexpected expense arises, the worker needs liquidity immediately,” he said.

The expert noted that Kaloba becomes attractive because it can provide money quickly to workers who may no longer qualify for additional formal borrowing due to their existing debt commitments.

 “Kaloba becomes an almost immediate lender of last resort because banks may require documentation, affordability assessments, credit checks, and processing time, while Kaloba provides money almost immediately and often relies on a quick informal assessment of the borrower’s ability to pay,” he said.

Chisanga warned that the convenience of short-term credit can create a dangerous cycle where financially constrained workers repeatedly borrow to address immediate needs, only to face reduced income when repayments become due.

“This creates a dangerous paradox because the more financially constrained somebody becomes, the more attractive expensive short-term credit becomes, and a worker today borrows money to solve an immediate problem, but tomorrow the salary is reduced because of repayment, creating another difficult financial situation,” he said.

 Chisanga called for stronger financial literacy programs, confidential debt counselling, and responsible consolidation of expensive loans and more affordable emergency credit facilities for public service workers.

 “We need stronger financial literacy programs for public service workers, confidential debt counselling, and responsible consolidation of multiple expensive loans, while emergency or short-term credit facilities should be more affordable and offered at a reasonable cost,” he said.

 Chisanga stated that promoting savings through emergency funds and making the total cost of Kaloba more transparent could help workers avoid falling into unsustainable borrowing patterns.

“There is a need to encourage saving and cultivate a culture of emergency funds through the payroll system, while greater transparency around the total cost of Kaloba and other shortterm credit should be established so that workers understand exactly what they are committing themselves to,” he said.

Chisanga said Kaloba should not automatically be labelled an addiction because its impact depends largely on whether workers use it occasionally to meet genuine emergencies or repeatedly to cover persistent financial shortfalls.

“Kaloba can be filling a small gap for genuine expenses, but it can also create a debt trap depending on how certain things are working out, and we should therefore look at how best to put things in the right perspective rather than simply describing every user as displaying addictive behavior,” he said.

Article  by Philip Sinkala