Say a friend calls you and asks for your help as they have delayed to pay rent (for whatever reason) and the landlord is on their case. They perhaps request to meet you in person to give you details of the predicament, and once that is done, even though you are not rolling in money yourself, you choose to help them, possibly even drain your account because they have promised to pay back in two weeks’ time. So you give them the money and part on good terms.
What was supposed to be two weeks (‘tops’ they said) is now going to five months, the person you bailed out suddenly went silent, the times you have reached out to get an update on the refund, you get excuse after excuse and truckload of promises to pay soon.
Then to avoid the awkwardness, they stop picking your calls or responding to any of your messages.
So you eventually give up, albeit painfully, and vow never to offer any financial assistance to anyone, ever again.
Although it is kind to offer assistance to others because you never know when you will need it yourself, money can ruin a friendship if trust is broken, and promises are not honoured.
How to go about this
Claudine Uwase, a resident of Gisozi, says it is okay to come through for someone, but don’t go broke as you try to help.
She says that it’s advisable to lend money that won’t hurt you in case someone fails to pay it back.
Uwase explains that it is easy for people to take advantage of their friends which is why it is necessary to sign a contract before giving them the money, as that way, in case they don’t pay, you can sue them.
She says that the contract should contain the borrower’s name, amount of money lent, payment due date, interest rate if any, and signature.
Uwase adds that you can actually decide to provide alternative help instead of giving a loan, for example, if someone wants a huge amount of money, help them with the little you can that won’t leave you feeling guilty about not helping or risking an amount that you may not get back. "But also, don’t be obligated to lend,” she says.
According to Claire Mutesi, a financial expert in Kigali, if someone has a history of not paying back, don’t bother with them because they will do the same to you.
She adds that it is important to inquire why someone needs the loan in the first place, if it’s not an emergency but say a trip, for example, you should not take that risk.
Mutesi is of the view that your needs and requirements should be a priority because you can’t make a sacrifice for someone who just wants cash to spend around.
"There is actually no harm in saying no if you don’t have money, or think the reason for lending the money is weak. If you lose a friend because you didn’t help them, then re-evaluate that friendship,” she says.
Mutesi adds that it is dangerous to loan what you can’t afford without pushing yourself to the wall.
She adds that one mistake some people make is to expect the same in return, which is wrong because that’s taking advantage of the situation. "If someone isn’t in the position to help you like you helped them, you may end up thwarted.”
Mutesi also points out that be clear that it’s a one-time support, so your friends know their limits, otherwise, you could turn out to be a bank every time they’re in need.
The financial expert notes that it’s easy for people to take advantage of one’s kindness if you don’t have limits. "Ask for time to think about it before you make the discussion to lend, and check if the money you have will cater for your expenses for a few more months. Also, look at the risks and avoid lending out of pressure or emotions,” she says.