A financial advisory firm, TransUnion, has urged consumers and businesses to pay their bills on time in order to protect their credit profile.
The warning has been issued amid the Covid-19 pandemic which is expected to lead to a shrink in income streams which may lead to people using their credit cards more.
“Paying on time is one of the biggest factors that affect your credit profile. It’s even more vital than usual to protect your credit profile during tough times because access to credit can often help you get through the rough patches,” said Kabelo Ramaselwana, Chief Executive Officer at TransUnion Botswana.
Ramaselwana said it is important to talk to creditors and lenders upfront if you are going to struggle to pay your bills in the next coming months.
“Consider contacting your bank or credit issuer if you’re affected by the Covid-19 pandemic. You may qualify for some leeway,” he said, adding that already several Botswana banks have announced payment holidays to help consumers and small businesses get through this time.
He continued that, “organizing your credit information and maintaining communication with your lenders are two ways you can help stay in control of your credit health during times of uncertainty.”
The Covid-19 comes at a time when household indebtedness are on the rise and people are struggling to repay their debts.
According to Bank of Botswana’s latest statistics, as of January 2020, Botswana households’ indebtedness levels rose from P35.2billion in January 2019 to P40.3bn in January 2020, a 9 percent Year-on-Year (YoY) growth.
“Consumer debt balances have increased sharply in the past 12 months, as growing numbers of consumers turn to unsecured credit, including credit cards and personal loans and overdraft, to cover daily expenses,” said Ramaselwana.
