Women and debt: Can they ever part?

illustration by Rachel Revilla

Sometime in 2022, a group of victims of online loan sharks, more commonly known as OLA (online lending apps or platforms) asked me to attend their very first grief counseling session. I had been doing a lot of interviews on bad lenders, investigating this emerging threat to Filipinos’ personal finances.

They were depressed, humiliated and at the end of their ropes. There were a lot of tears, anger and frustration. As I entered the room, I noticed that almost all of them were women. True, the men may have simply decided not to come. After all, talking is not most men’s cup of tea. But when I gave a women financial empowerment workshop to residents of Tondo twice last year, most were also women and they were also the ones who told me about debt problems.

Based on the 2021 Bangko Sentral ng Pilipinas’ Financial Inclusion Survey Report, almost half of Filipino adults had an outstanding loan. Family, friends and microfinance non-government organizations are the top sources of debt.

Instead of savings, borrowing is the most common coping mechanism in the country. To the Gen Z readers, let’s call that “copium.” (Shoutout to my kids who taught me the term.)

Not surprisingly, the survey showed that women had more debt than men.

That’s because although men are still the breadwinners in Philippine society, the household politics of pechay versus cauliflower is left to women. And when the purse strings are stretched and frayed, women are the ones who usually find the means to raise cash. And these days, the easiest ones that women love for their convenience and secrecy (at least when they are applying for the loan) are OLAs. Unfortunately, women are also more commonly self-confessed math-haters.

Computing compounded interest on loans is hard enough for the ordinary individual; how much more for those who believe they are math-handicapped? As you know, some nefarious OLAs charge very high fees, which are disclosed only after the application is approved. Sometimes, victims borrow P3,000 and receive only P1,500. Their effective interest rates reach more than 300 percent annualized.

To be fair, there are good OLAs and there are bad ones. But women admit that they ignore the numbers and focus instead only on the amount they need to pay every day when they are looking for lenders. Separating the good ones from the bad ones is difficult for them.

As a result, women are the ones vulnerable to the debt shaming, harassment and desperation. That is now increasingly the plight of those who borrow from bad online predatory lenders. They lose their jobs, their reputation and there were some who even committed suicide.

The silent suffering must end

Women cannot be the light of their homes when they fear every waking moment. Can women and unsustainable debt ever part? Try these steps:

• Do not suffer in silence. Ask for help. You do not have to handle this alone.
• Exhaust low-interest loans first and avoid bad OLAs. There are government bodies and microfinance institutions that are better options and will not harass you if you are delayed in paying.
• Even in your desperation, be wary of interest rates that seem to be easy to pay.
• If you are already in debt, make an inventory of all your debts. If you feel that you can’t meet the required payments, do not wait for the financial institution to call you. Call them.
• Create a schedule of payments based on your cash flow. It is easier to stick to the plan once your calendar can show you when you will be able to zero out everything.

Everybody deserves a second chance and that means helping women (and men) who are heavily indebted. I propose setting up debt consolidation mechanisms that are not too expensive, debt counseling and a national bureau of financial education that can provide this support.

We cannot keep teaching financial education to people as if teaching them how to swim and then throwing them out into a sea full of sharks.

—Contributed