There was a young lady who admired to be married to a young man with a Payslip. That lady not once she fell in love with working men, both young and the old, and majority of them exploited her. To her a Payslip meant a comfortable life. But, do you know some pay slips have no joy and are like an onion or a corpse?
Years gone, when I used to be a credit officer I encountered all sorts of pay slips on regular basis. I know what many people in various fields earn and without doubt the fact is business field though it does not have a pay slip is much better. People in business field lead a life that many people with a pay slip cannot afford.
Let, me educate you about a pay slip. A pay slip indicates total income one receives at the end of the month and what is deducted. One can have a pay of say ksh50,000/= but at the end of the month the amount that hits the account is like fresh onion.
The major deductions on pay slips are; PAYE (tax), NHIF and loans one has with financial institutions and Sacco's. According to the law, an employee is supposed to go home with at least a third of his or her pay after the basic deductions. That is after PAYE, NSSF and NHIF. Therefore, a person who earns ksh50,000/=, and pays a PAYE of around 7,000/=, NHIF of around 1,300/= and NSSF of around 200/=, is supposed to take home at least around ksh14,000/= ((50,000-7,000-1,300-200)/3). But, in most cases many people with pay slips go home almost empty handed.
There is a evil mind that speaks to people once they get employed, especially, when the employment is permanent and pensionable. It directs them to banks to take loans. I have been a banker for more than 3 years and the truth is bank loans are not the best. If I could advise an ear that want to hear I would recommend a Sacco. Reason being, in a Sacco one is able to contain the appetite for borrowing due to share strength and one is able earns dividends.
The banks know new employees do not have shares in Sacco's that they can use to secure loans, and thus they lure new employees with loans that seem to be good but they are trap. When a banker tells you three pay slips only and an appointment letter is what is needed for you to get a loan of thousands if not a million know you might get into trouble in the rest of your life. For your information, there are employees in banks who manages relationship with institutions that employs people. Banks knows when new employees are reporting to work, be it in counties, parastatals, and the like and they come to market their accounts and loans products. At that time, new employees see angels.
The problem starts when one applies the loan. If the pay slip is clean the loan officer encourages the loan applicant to apply the maximum amount the pay slip can accommodate. That is where the one third rule comes into play with repayment schedule. In a normal case, a long term loan is supposed to take 5 to 6 yrs. But, a seasoned loan officers with a aim of killing the loan applicant completely writes a recommendation letter for the applicant to be given the loan with even 7 years! That means if the bank approves the loan application the applicant will live for the next 7 years with a pay of around 14,000/= per month. Now, how will one survive with that amount? The situation can be worsened if the applicant is the sole family breadwinner and the amount borrowed is not put into income generating activities. If you want to know about money borrowed for wrong purposes look for people who borrowed to buy land that lies idle or borrowed for consumption.
If you think banks leave your pay slip immediately long term loan hits your account forget about it. They know you still have an appetite for more money and the law does not allow them to strain your pay slip more, therefore, they present to you salary advance loans and mobile loans. They still want to remain with the ksh14,000/= that come in your account every month provided you do not change the pay point. If one does not look on his or her pay slip carefully, living on mobile loans and salary advance becomes the order of the day. And do not forget banks allow you to top up the loan after you have repaid a given amount or in case of a salary increment.
Let, me educate you about a pay slip. A pay slip indicates total income one receives at the end of the month and what is deducted. One can have a pay of say ksh50,000/= but at the end of the month the amount that hits the account is like fresh onion.
The major deductions on pay slips are; PAYE (tax), NHIF and loans one has with financial institutions and Sacco's. According to the law, an employee is supposed to go home with at least a third of his or her pay after the basic deductions. That is after PAYE, NSSF and NHIF. Therefore, a person who earns ksh50,000/=, and pays a PAYE of around 7,000/=, NHIF of around 1,300/= and NSSF of around 200/=, is supposed to take home at least around ksh14,000/= ((50,000-7,000-1,300-200)/3). But, in most cases many people with pay slips go home almost empty handed.
There is a evil mind that speaks to people once they get employed, especially, when the employment is permanent and pensionable. It directs them to banks to take loans. I have been a banker for more than 3 years and the truth is bank loans are not the best. If I could advise an ear that want to hear I would recommend a Sacco. Reason being, in a Sacco one is able to contain the appetite for borrowing due to share strength and one is able earns dividends.
The banks know new employees do not have shares in Sacco's that they can use to secure loans, and thus they lure new employees with loans that seem to be good but they are trap. When a banker tells you three pay slips only and an appointment letter is what is needed for you to get a loan of thousands if not a million know you might get into trouble in the rest of your life. For your information, there are employees in banks who manages relationship with institutions that employs people. Banks knows when new employees are reporting to work, be it in counties, parastatals, and the like and they come to market their accounts and loans products. At that time, new employees see angels.
The problem starts when one applies the loan. If the pay slip is clean the loan officer encourages the loan applicant to apply the maximum amount the pay slip can accommodate. That is where the one third rule comes into play with repayment schedule. In a normal case, a long term loan is supposed to take 5 to 6 yrs. But, a seasoned loan officers with a aim of killing the loan applicant completely writes a recommendation letter for the applicant to be given the loan with even 7 years! That means if the bank approves the loan application the applicant will live for the next 7 years with a pay of around 14,000/= per month. Now, how will one survive with that amount? The situation can be worsened if the applicant is the sole family breadwinner and the amount borrowed is not put into income generating activities. If you want to know about money borrowed for wrong purposes look for people who borrowed to buy land that lies idle or borrowed for consumption.
If you think banks leave your pay slip immediately long term loan hits your account forget about it. They know you still have an appetite for more money and the law does not allow them to strain your pay slip more, therefore, they present to you salary advance loans and mobile loans. They still want to remain with the ksh14,000/= that come in your account every month provided you do not change the pay point. If one does not look on his or her pay slip carefully, living on mobile loans and salary advance becomes the order of the day. And do not forget banks allow you to top up the loan after you have repaid a given amount or in case of a salary increment.
