Just like I was looking for moral and financial support when I started my career, many youngsters need support from people who are established. I have been an active participant in trying to provide similar assistance and support, to the best of my means and limitations, for the last 20 years. It is a pleasure to share a couple of experiences I learnt out of my experiences on matters of financial assistance.
Majority of the people who seek help come with genuine repayment plans and fulfill their commitments on time. It is always a pleasure extending support to persons with such an attitude. If the loan is for commercial purposes, there is nothing wrong for the lender to have a fair return, as the objective of the loan was to earn money.
If the loan is for an essential nature, I consider providing assistance ‘free of interest’ as getting them out of the financial strain is an adequate satisfaction. But the borrower should realise that the lender has given the help depriving himself of the earnings that he otherwise would earn on that amount.
However, I have experienced that this ‘interest free’ tag has a negative effect. In such cases, the borrower instead of being grateful for receiving concessions, unfortunately, feels that it was his ‘right’ to have received that assistance. In certain cases it was taken for granted as a gift. Besides the borrower conveniently takes the repayment of interest-free loan as a last priority, as it doesn’t cost him to delay the repayments. In most of the cases, the borrower avoids talking to lender as he considers it is the duty of the lender to ask for money. In some cases, because of the relationship in question, the lender does not talk about it, converting “good money” to “bad money”.
Who is responsible for this? The borrower? No. My experience says, it is the me the lender’s fault, for very many reasons.
- First of all, the loan given was emotion-based and not merit based
- Secondly, I mis-judged the borrower, in his attitude
- Thirdly, I reduced the value of money, by giving the loan interest free
- Fourthly, if the loan was given for non-essential purposes, I helped the borrower in investing the funds for non-productive purposes.
Thus I was the one who spoiled them. I could have been wiser in taking the borrower in confidence by explaining that I value my relationship with him and wish to avoid misunderstandings in future citing Shakespeare, “neither a lender nor a borrower be.”
Had I said a firm “No” and avoided getting emotional, I could have saved them and their deterioration in quality of attitude. Above all I could have retained my relations with them!