Africa-Press – Zambia. Let’s say you need a K100,000 to sort out a few things. So you go to Bayport to borrow against your salary of say, net, K3500 for 12 months. Bayport tell you instead of paying K9,167 per month, you can can be paying them interest of K833 for the next 12 months assuming you have invested the K100,000 properly. Then you can pay them back the full principle amount of K100,000 next year after you have made some revenue from your investment. However, due to recklessness, you use the 100,000 on unproductive ventures.
Upon realizing the mistake you go to ZANACO and borrow another K200,000 because according to you, from the net of K3500 you are only paying Bayport K833. ZANACO book your loan for three years with K2500 monthly repayments. This brings your monthly debt repayment to K3,333 against your pay of K3500. You realize you need to pay rentals, buy fuel and pay bills.
Upon realizing the mess you are in, you decide to engage Bayport and ZANACO because you have realized that by 2025 you still won’t be able to pay the K100,000 nor manage the ZANACO loan.
So you ask Bayport to suspend the K833 deduction for few months. You also request ZANACO to suspend their K2500 for a few months. Then they agree to your request on a condition that you use the 6 months grace period to order some salaula bells so that you use the profit from the salaula business to resume the total K3333 repayments and also settle the K100,000 to Bayport when it falls due in 2026 (new renegotiated deadline).
So now you can afford to buy food, pay rentals and bills as well as generate some extra money to service your two nkongoles as and when they fall due. This is debt restructuring.
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