ILLUSTRATIVE SIMPLE EXAMPLE OF HOW MR A AND MR B USED THEIR LOANS (Please read this to understand our debt problem)

Borrowing money is not a bad thing if you use the money correctly, most people that became wealthy financed their business through loans.

Let’s give you a practical example ;

Mr A and Mr B both work for the same company in the same capacity. They both have a salary of K10,000.

Mr A goes to FNB Bank and gets a loan of K200,000, he negotiates an interest rate of 25% and a repayment period of 7 years.

Mr B goes to ZANACO and also gets a loan of K200,000, he gets a higher interest rate of 35% and a repayment period of only 5 years.

They now both have K200,000 in the bank right?

Mr A uses the K200,000 to buy a hammer mill and a Bus.
He uses both for business, he charges people to use the hammer mill and charges fees for the use of the bus.
Every month he makes K10,000 profit from his business.
From this profit, he takes K5000 as monthly loan repayment to the bank, K2000 for personal consumption and K3000 remains in the business, over time he buys a second hammer mill and another bus and his business expands, he now makes K20,000 per month from his business, and soon he clears his loan with FNB with no problems and never having to use his salary for loan repayments.

Eventually he builds some flats, put them on rent and buys a nice car.

Let’s now talk about Mr B

When Mr B gets his K200,000 loan, he buys a Benz for K120,000, he goes on holiday to Cape Town for K40,000 and spends the remaining K40,000 on household furniture, partying and expensive outings.

He now starts making his loan repayments of K6000 from his K10,000 salary to the bank for loan repayments. That leaves him now with only K4000 to pay rent, school fees for his children and other expenses. After 8 months he fails to make his loan repayments and Zanaco comes after him, they grab the Benz, grab his furniture and take him to court, they obtain an order to get his salary until the loan is paid.

The court declares Mr B bankrupt and extreme poverty strikes his home.
In trying to stay afloat, Mr B starts borrowing more and more money from unscrupulous lenders getting himself in more problems.


1: Do not borrow for consumption, borrow for investment.
When you borrow, have a plan, invest the money in income generating activities, those activities should be able to generate enough profit for you to pay the loan, make a profit and not use your salary. Your salary should only be a means for you to obtain the loan.

2: When you borrow, negotiate good interest rates and a reasonable repayment period.

3: Do not waste or steal borrowed money.

Paul Kagame of Rwanda is Mr A, he borrowed for good reason, invested the money wisely, no pilferage, the investments paid off, he paid back the loans and the economy expanded.

ECL is Mr B, he borrowed for consumption, buying JETS, endless foreign trips abroad, fire tenders, Corruption and useless things that don’t generate any income. Alot of the money was stolen.

As a result, the loans had to be paid back from taxpayers money, reducing financial budgetary allocation for health and education, hence no medicines in hospitals.

As the debts mounted he went to the Chinese and borrowed more and more money until the country became bankrupt.

Copyright @ NDC Media


  1. Easy to understand and relate to, yet with all this free eye opener most Zambians still opt for a Mr. B preference a “kulibonesha” syndrome amidst poverty! Probably an “Economics made simple” subject should be introduced in our schools as early as Grade 5 at being prudent! It’s like among the Zambians that have made it in economic success their paths were full of life challenges and had to learn the hard way, thus knowing this it can be “made simple” to help develop minds.

  2. Why doesn’t this man just step down? Where is he even getting the courage to walk head up.look at the KCM scandal, were is this man getting advise from and why does it look like the country is being run by teenagers.With all that’s going on,if I were MR b,I would even fake an illness just so as to get sympathy from the angry Zambians.change is around the corner and I swear these people should be held accountable for all they’ve done.personally I feel it is very unfair for us and our grandchildren to suffer for someone else’s incompetence while his family enjoys the life feed from a silver spoon.never………!!!!!! Sir just step down and call for early elections.bowman,Jean kapata,inonge,chitotela,chilufya chitalu,given lubinda,Dora siliya, kampyongo,Davis chama and bwalya n’gandu will face the law one day and serious consiquences.these people should be made to pay

  3. ECL, Please step down. Your ignorance is scandalous. You are intellectually unfit to manage a complex entity such as Zambia. Your abilities are to low to handle the multiple problems that the country is facing, which in most cases are of your own making. Remember that ignorance is no defence at the presidential level of leadership. Your incompetence is reflected in all the institutions of governance. You have clearly turned the state into a criminal setup as evidenced by your silence on the crimes committed by your supporters against Zambians – Inflated prices of firetenders, ambulance, roads projects, gassing of Zambians, arming of your private militia, etc. Sir, all crimes must come to a stop, NOW.


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