Credit makes the world go round, the world go round Julia Suryakusuma   ;  The writer is the author of Julia’s Jihad

JAKARTA POST,  05 Februari 2014

                                                                                                                       

                                                                                         

                                                      

Those of you who are old enough might remember the song “Money, Money”, which was sung by Liza Minnelli and Joel Grey in the Oscar-winning 1972 Bob Fosse musical, Cabaret, and included the line: “Money makes the world go round”.  These days I reckon it would be more apt to sing “credit makes the world go round”, as no one is unaffected by credit; from individuals to entire countries — everyone now lives off credit, directly or indirectly. In common parlance, it’s called debt. In fact, we now live in a worldwide culture of debt — including in Indonesia. It’s amazingly easy to get credit nowadays via bank loans, money lenders (who in Jakarta tack advertising signs onto trees — I kid you not), pawnshops, paying for goods in installments and credit cards. But the most aggressive form now available in Indonesia is kredit tanpa agunan (KTA) — credit without collateral.  Let me tell you the sad story of Rizki and his KTA crisis. Due to the constantly rising cost of living, Rizki, a man in his mid-40s, was ensnared by KTA, which became popular about five years ago after the government cracked down on the issuance of new credit cards. With four kids all in school and two elderly parents to support, it was not surprising that his finances were stretched. Rizki came from a humble background and did not have a high education. However, he was smart and hardworking and had gained the trust of his boss who owned a small business, and soon became his personal assistant.  His monetary strain increased when the roof on his house collapsed due to termites and damp. So, when a salesgirl from a well-known foreign bank approached him in a shopping mall offering him KTA, he couldn’t say no. To apply, all he needed was a credit card, a bank book and his national identity card (KTP). Fill out the form, sign it and voila! The salesgirl told Rizki that his application for KTA would be approved within a week. Pretty simple and straightforward, right? Except for one thing: The signature and documents Rizki used were not his at all. They belonged to his boss; and the documents weren’t even originals, just photocopies! Clearly Rizki had committed fraud — probably with the salesgirl’s collusion. Since they’re casual workers, these salesgirls don’t feel the responsibility to safeguard the reputation of the bank they are meant to represent. Nevertheless, the bank remains responsible.  In the past two-and-a-half months alone, I have received 50 text messages offering KTA. Obviously I’m not the only one who’s bothered by these SMS, but the situation is getting out of control. “Borrow up to 1M [Rp 1 billion]”, they say. “No collateral […] KTP and credit card enough […] fast and easy process. Contact Dini 0823xxxxxxxx.” The loan limit varies in each SMS, but borrowing up to Rp 1 billion (US$82,000) without collateral? Pretty risky? Plain crazy, actually. How do these banks get people’s phone numbers anyway? Are they being sold? If so, who is selling them? Isn’t this a breach of privacy? Isn’t there a law against this? Then, of course, there are the dangers of KTA and any other form of easy credit. At least Rizki was using the loan money for urgent and important things, but will he be able to repay? Or will he be caught in a spiral of gali lubang, tutup lubang (dig a hole, cover it up) — meaning borrowing again to pay off his debt, and so it goes on. Or will he go to jail for fraud? Many know the dangers of easy credit. Remember how it resulted in both the Asian and American financial crises? Pretty major, that. And we tend to forget the non-monetary cost of being in debt. Debt is a dark cloud that engulfs debtors’ lives, casting a shadow over confidence, self-esteem, plans, ambitions, relationships and health. When Rizki started to fall into arrears with his repayments, the bank called up his boss and Rizki was busted. Understandably, the breach of trust was difficult to repair and the relationship — Rizki had once been considered family — took a heavy blow. No wonder Islam considers being in debt a serious sin. According to Ustad Uday, a popular Islamic preacher, “debt makes you restless at night and ashamed by day”. Uday claims that the Prophet was even unwilling to pray for a deceased person who was still in debt. Even if you’re a martyr, dying to defend Islam, your sins of debt are not forgiven, and your legal heir is obliged to pay up.  In our consumer society, we are brainwashed to believe that things make you happy, and many have succumbed to this. But in case you hadn’t heard, there’s an ongoing global economic crisis and the meltdown could be even worse than before. All because of reckless borrowing and an unwillingness to learn from the past. What the world needs now, besides love sweet love, is the ability to forgo its debt culture. Money is not the root of all evil; in fact, it can do a lot of good. But debt has become a dirty word — with good reason.  Merrill Lynch economist David Rosenberg has declared that “frugality is now replacing frivolity. Households are about to be put on a radical diet, and living within one’s means could soon be a fact of life.” And all this time I thought it was normal. How old fashioned of me! So, let’s free ourselves of debt, and perhaps we can sing the Cabaret “Money, Money” song again! ●