By Chibamba Kanyama
The main question coming from you following my latest post is for me to explain the link between Eurobondholders and IMF. The best way is to share a true story to simplify, really simplify this relationship.
In January 2019, a young Christian woman (Zambia) I had mentored came crying at the office, saying she was about to commit suicide because those in her village banking group (Eurobondholders) were demanding their money. She had no capacity to pay and the debts were over the roof. She had even spent two nights in police cells; everyone in the compound calling her thief. As a young mother of three, educating her children was difficult.
Her coming to me (IMF) was to bail her out if possible. Her life was unbearable and if she had no children, she would have tied a rope around her neck.
I told her the best I could do to help her was for her to arrange a meeting for me to assure the creditors that she would pay back over a two year period and not six months (which was already overdue by three months). But it was not for me to pay them; she still was going to pay them but over a period of time to give chance for her small trading business to grow and expand (if I was truly IMF, I would even have given her some working capital spread over three installments so that if she demonstrated capacity to pay these creditors at every juncture, I would release subsequent installments; to also be paid back but at mutengo-waku-Church interest rate).
We met these angry creditors at a lodge. They came for the meeting because they heard it was me to address them. ‘We are happy Mr. Chibamba Kanyama for coming in. We trust you. We also believe you are a great teacher of business. Since you have committed to help this woman pay back the debts she owes us, we are willing to wait a little longer.’
The journey of managing this woman started. I told her my reputation was at stake and for this, I demanded that my wife and I would regularly manage her financial affairs. She stopped partying for that period of time. When she had funerals, we advised her to miss them unless they were for immediate family members. We insisted she would not go to Shoprite unless we approved the expenditure budget.
A lot of things started to change and she did not like some of the demands but obliged because I was also worried of my reputation for morally guaranteeing her loans.
By June this year, after two years, she had paid off everything (I still remember the screaming, not of suicide, but of excitement when she made the last payment). More than that, she has learnt how to manage other people’s money, her own money and her business. (Note there is a bit of exaggeration to this story but did so to simplify the Zambia-IMF- Eurobondholders relationship).