Zimpapers Logo

Civil servants are arguably the most indebted workers in the country.  

Loan sharks as well as clothing and furniture chains find civil servants an easy market, getting them to sign papers permitting the Salary Service Bureau (SSB) to directly debit their salaries to service the loans and debts to clothing and furniture shops.  Instead of having to run after bad debtors as often happens if they lend to private sector workers, loan sharks and retailers are assured that the SSB will collect their monies on their behalf. They are also assured that even if the civil servant leaves their job, the creditors will simply make a claim at the SSB against the former worker’s pension and other benefits to be able to recoup whatever amounts they are owed.  

While Government workers tend to have it easier to borrow than their counterparts in the private sector, this ease of borrowing has been a curse of sorts. Most of them are, as a result, neck-deep in debt and have no idea how they can extricate themselves. We have had reports of some civil servants, especially male ones, showing presiding magistrates in maintenance cases pay slips with embarrassingly low net salaries after most of their money would have been taken as direct deductions at the SSB by micro-finance institutions, clothing and furniture outlets.

There might be a respite to this very traditional challenge facing civil servants after Cabinet yesterday committed itself to ensuring that Government employees access low-interest loans from a fund into which the employer has already put $100 million as seed capital.  

Briefing the media after yesterday’s Cabinet meeting, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said Government has approved the establishment of the Government Employees Mutual Savings Fund (GEMS Fund) and injected the seed capital to be augmented by a deduction of 2,5 percent from the total pay of every State employee. 

The fund will allow civil servants and members of the defence forces to access loans at an interest rate of between two and seven percent, lower than the 12 to 30 percent charged by commercial lenders and possibly far lower than what loan sharks levy.

Minister Mutsvangwa said after looking at proposals from Finance and Economic Development Minister Professor Mthuli Ncube, Cabinet resolved that the GEMS Fund be established with effect from next month.

A steering committee comprising the Public Service Commission, Ministry of Finance and Economic Development and the Office of the President and Cabinet will decide on the implementation modalities of the fund. 

“We realised that some of our Government workers are heavily indebted to loan sharks,” said Prof Ncube. “We want to solve the problem of borrowing from loan sharks and since it’s a mutual facility people can opt out.”

The GEMS Fund will potentially be of great help to civil servants. It will extricate them from loan sharks who have preyed on them for long to such an extent that instead of alleviating their financial challenges, the extortionate loans are actually worsening their poverty. This has been damaging the personal dignity of civil servants.  It is like them digging a hole to close another.  

Civil servants should be delighted with this plan and want the Government to move fast in setting set up the fund, working out the modalities to enable them to start borrowing from it.

There are many good things about the proposed fund. 

One of them is that it is a kind of savings club for civil servants as they will contribute to it and be able to borrow from it as and when they decide to. This, we have to point out, will not be the first such funding facility in the country as there are many employers in the private sector that allow their workers to contribute monthly to welfare funds from which they can get loans which they will repay at affordable interest rates over some time.

Therefore, the GEMS Fund will be theirs, civil servants will be shareholders to it on the basis of their monthly contributions to it.  

Also, civil servants must be encouraged to take ownership of the fund and enjoy the dignity of borrowing from it instead of them making that monthly, reluctant trip to the Shylocks of our time who exact steep interest rates on loans. 

Another interesting point is the interest rate of between two and seven percent.  Seen against the prevailing interest rates, civil servants will, effectively be getting money for free from the GEMS Fund.  That is good. 

Cabinet said this is a voluntary fund, meaning that workers who are unwilling to be part of it cannot be forced to be in it.  This is important since not all civil servants are of little means requiring a break from loan sharks.