With the changing dynamics of global business construction and the economical effects of the COVID 19 pandemic coupled with other extra social factors like banditr
y, terrorism, cold wars etc, it does not have to take a financial expert to know that we are in tough economic times even the crypto world is not spared.
The unemployment rate Inthe world and specifically Nigeria is still high and individuals cum businesses are barely surviving. Nowadays that people who live on their income alone without taking a loan to meet pressing needs are rare. Also, these loans are not provided without so form of collateral which can range from cars to landed property.
While we agree that taking a loan may be necessary, the downside of this arrangement is when the borrower is not able to repay the loan and the financial institution takes possession of the collateral. When this happens, negative stories about the high handedness of financial institutions vet circulated and people become wary about taking up loans.
Had an encounter with a technician who needed money to invest in some equipment but refused to take a loan because of a bad experience his cousin had. His cousin had everything going well for home, he was a middle aged man who held a top management position a a blue chip company, then he resigned to start his own business. In the course of running a now successful business, he took a loan to expand the business but passed one before repaying his debt. The financial institution that granted the loan came knocking. His wife was shocked to discover that her husband had used their only house, the shekter she had thought would be a solace as a collateral for the loan. Unfortunately, the family lost their home and that was the beginning of their journey into financial difficulty.
The story could have turned out different if he took the loan with credit risk insurance policy to ease off the burden of inability to pay back Incase of demise or exigencies that can render him unable to pay.
If you must take loans have a credit risk insurance facility.