Debt on tap: Is this the way to go?

Though I have never been one to believe the banking industry exists purely for altruistic social empowerment motives, I have always thought they would be leading the charge in educating on the basic principle that a fiscally prudent society tends to be more prosperous in the long run. Sustained economic prosperity would, of course, only ever be good for the banks. After all we are currently seeing (yet again!) just what happens when everyone gets caught in an ill-advised quick-dollar chasing spree, are we not?

Now in a country like South Africa (though it is largely insulated from the worst of the global shocks thanks again Trevor, Tito and the ANC economic policy guys — and please stick around a few more years) which still suffers from a huge personal and household debt burden, some measure of responsibility is to be expected from banks in terms of how they go about extending credit.

Everyone agrees that the average South African is hardly a Suze Orman or Robert Kiyosaki when it comes to managing debt, but one does wonder if ANY financial self-help gurus even remember having to balance the books. Add to that the fact that most South Africans (and our future pres apparently) still lack the basic financial know-how to be make crucial financing decisions without informed help.

Last weekend, I was withdrawing cash at an ATM belonging to one of the Big 4, which I have been banking with since I ever started banking. While waiting for the transaction to process, which usually takes long for one whose financial situation is almost perpetually perilous, a notice came up on screen that said I could, while I stood there on the street, apply for a personal loan and get instant approval and access to funds right there and then. Can you imagine, if tied up financially, you do not have to face any sober, probing bank manager type. Just waltz up to an ATM, punch a few numbers and voila, ka-ching-ching! “Awesome!” I hear you cry. But wait, let’s take a step back and think. This is in the same South Africa that racked up debt while the economy was booming.

Now I am not against the convenience and relative safety of fast, electronic services. But not for loaning money to a nation with as much prudence with cash as the Irish have with the black ale on St Paddy’s. Especially in the current economic environment. Let’s be frank here — in the cynical yet effective gambit stakes — dangling money in front of Saffers is beaten only by putting a microphone in front of Julius Malema or the trappings of power to Shikota. It is just that irresistible to us. So is being that casual about debt the way to go when those who steer the economy are preaching caution at every available opportunity?

I am sure the scheme is pretty legal and the bank concerned has a whole host of arguments in favour of this route to market mechanism, but I surely cannot be alone in thinking this doesn’t pass the moral-responsibility test. Yes grown-ups should exercise caution but to use a somewhat blunt analogy, what chance would an addict stand of beating his habit if the dealer kept making access easier? Sure, give people loans, but with the proper guidance and counselling.

How would one get that from an ATM?