Many of us are engaged in different struggles: some to survive, some to find purpose, some to love and be loved, some to enjoy life, and some to become filthy rich, and work out what to do with that money later. Those who have charitable or political goals rely on donations and book sales to focus on charitable or political goals full time. Those who just want to own their homes, have a family and have a car must rely on their income and inherited wealth if they are lucky.
We all have different ideas about how to achieve these goals. Some start businesses, some write content to sell it, some start jobs and other become investors. Most people combine these vehicles and other strategies. Usually building a business requires too much money for any one individual to use their savings. The cost of a new car is often too high so most of us buy second hand. The cost of a house or apartment is also too large an upfront outlay. To buy a house or a car when you are just starting out, savings usually are not enough and many of us have to take out a mortgage, a car loan or some form of credit.
Many people are unaware of the wide-ranging significance of our need to own a home, a car and fund our living expenses. The insurance and pension industries exist because we have to protect the value of our homes, the content of our homes and our cars against accidents, theft, fire or natural disasters. When we get old, we may want to purchase an annuity, we may be eligible to earn a state pension or we may go it alone and use life long savings to construct a portfolio that we draw living expenses from in our old age.
Our taxes pay for government officials, public goods, state governments (called local authorities under the Parliamentary system), federal governments (called central governments under the Parliament system), and parastatals. Our taxes pay for education, national security, transport infrastructure, basic levels of public health, energy security, agricultural self-sufficiency and waste disposal.
Most of us are educated from a young age about us and them. Whatever country you live in is “us” and everyone else is them. Whatever socio-economic class you are born into is “us” and everyone else is them. We very quickly learn that everyone is not equally smart, not equally connected, not equally wealthy and not equally protected by the law. Non-fee-paying schools produce workers and “direct reports” of the future. Fee-paying schools train the elite of the future. Children of the ultra-rich (worth $10 million or more) become the shareholders of the future that the elite get their instructions from. The A students work in companies run by the B students in countries run by the C students or wealthy drop outs.
Some people know what is going, some people don’t know what is going and those acted upon are the people constantly finding out after decisions have happened what is going on. In every language around the world, across time, in some form or another, this has gone on; and continues. The working class in all economies didn’t always have a vote, education and access to finance. Not having enough and needing to work to receive money remains the main activity most are committed to by default. Many in debt are either highly educated or have received basic levels of education. Most citizens of the OECD rely on bank loans to get a university loan to get a degree, to buy their first house, buy their first car, and to do home-improvement projects. Surely, we have nothing in common with 15th century west Africans?
Once upon a time, when most societies around the world had literacy below 40% (between 1500 AD and 1800 AD), how did ordinary people raise money to build a house, buy a farm, pay for a wedding, pay for a burial without writing. Strangely enough the Yoruba people in West Africa had a few instruments for lending money to borrowers in precolonial times, when literacy was below 5%.
Yoruba land: Ilè Yorùbá
Yoruba land in West Africa was the cultural region of the Yoruba people spanning across the present-day countries of Nigeria, Togo and Benin covering a total land area of 142,114 Km2. In the pre-colonial era, many reasons drove people to borrow money in Yoruba lands including business dealings, occupational financing, curing of sickness, financing calamities or misfortunes or in funeral ceremonies.
All these reasons as well as others allowed the traditional debt recovery systems to be an integral part of the tradition and culture of the Yoruba people. It was of extreme importance because even though in pre-colonial Yoruba being in debt was considered an act of great immorality, it was a common phenomenon among adult men and sometimes among the high chiefs.
Indebtedness was something that involved all members of the family. In pre-colonial Yoruba society, people tried to be cautious not to incur heavy debt that would put their children’s future at risk. Thus, Yoruba people frowned upon unguided spending and financial indebtedness since not only did they affect the debtor or the parents of the family, but they carried on with the children and they threatened their future with the possibility of poverty. That is why parents made it a priority to pay their debts, and if they couldn’t do it alone, extended family members would assist the family when possible.
Since credit and debt institutions formed a vital part of the Yoruba culture and economy, many systems of debt recovery were applied among which the following systems were the most common; Osomalo, Ologo and Iwofa.
The Osomalo traditional debt recovery system was a popular system among the Ijesha people (cloth sellers) of Yoruba. The word Osomalo was linked to the debt collection process since it is short for “Osomalogbowomi” which means “I will maintain my squatting position until I have collected my money”. Since it was considered a great transgression for a creditor to die in the house of a debtor, an Ijesha creditor who wanted to get his money from a debtor would compromise his health with different actions such as sitting in a squatting position for lengthy periods while asking to drink water in excessive amounts. Such actions threatened the debtor and would force them to pay the debt by any means possible including asking family members to assist in the payment.
The unpleasant aspects of the Osomalo system of collecting debt were:
- Time wasting for both the creditor and the debtor.
- Public disgrace and exposure of the debtor’s personal life and secrets by the creditor.
- The creditors limited the debtor and disallowed them to work or do other things that could fetch them the money to pay their debts.
- It caused disturbance and commotion in the community, particularly, in the area where the debtor lived which often led to chaos and uproars.
Another popular system of debt recovery was the Ologo system. It involved the creditor sending a local bailiff (Ologo) to the debtor’s house. The Ologo would then occupy an area in the debtor’s house and live at his expense until he pays off his debt. To ensure this method’s success, the creditor would employ a person with unbearable sight or a person with a contagious disease such as leprosy. The Ologos would use all means they could to irritate the debtors and compel them to make the due payments with means such as forcefully taking the food of debtors or putting on the debtor’s attires without their permission. The debtor couldn’t touch or expel the Ologos from their house because it was considered as a taboo. If debtors were to do such actions, it would be considered as a serious public offence and in addition to making the due payment, the debtor would be purged. Ologos were given license to use extreme measures to make things unbearable for debtors even if Ologos had to harass family members of the debtor, destroy properties or be disruptive so as to deny the household members sleep. This ensured that the debtor or his associates would pay as early as possible.
The unpleasant aspects of the Ologo system of collecting debt were:
- The involvement of firm physical force. This was applied in seizing the debtor’s food by force, wearing their clothes or any action to basically deprive the household of their peace of mind.
- The risk of acquiring a contagious disease and thus the spreading of that disease among the community.
- The constant state of worry and fear that the debtor and his family lived in.
The Iwofa system of debt recovery was another common system in pre-colonial Youba. Iwofa system operated in a way that is sort of similar to a mortgage. The borrower received the amount of money that he needed upfront, but they had to work for a pre-determined amount of time to pay that money back. The person doing the work could be the debtor himself or it could be a member of the debtor’s family and they were to do work for the creditor until the debtor made the payment and the pre-determined amount of time is up. The Iwofa system was mostly applied to either punish the rich transgressors by reducing them to pauper status or it could be used to fine committers of serious crimes such as theft or rape. Still, the borrower or the debtor retained their rights of having their own house, their own family, their own wife and children. It was a system which secured the loan in return for the labour of the borrower or of a person associated to the borrower.
The unpleasant aspects of the Iwofa system of collecting debt were:
- Sending family members to perform the pre-determined amount of work.
- The total service rendered plus the amount of money that was to be paid back was usually more than the real value of the principle money owned.
Knowing how these three debt-paying systems worked make us realize that even though it was pre-colonial times in Yoruba, people managed to structure financial systems and different methods conducting loans so that it would fit different people in different situations. It could be said that these very early forms of loan systems gradually developed and evolved by time in order to reduce their negative aspects. People came to have better knowledge to know both their rights and obligations when asking for or giving a loan, and the process came to be legally documented to ensure that neither party is being wronged until the loan is finally paid back.
- Okary, Ifueko Omoigui (2012) A comprehensive tax history of Nigeria. Nigeria: Safari Books
- Raji, A. O. Y and Abejide, T. S (2013) The guild system and its role in the economy of pre- colonial Yoruba land. Arabian Journal of Business and Management Review (OMAN Chapter)
- Eades, J. S (1980) The Yoruba today. UK: Cambridge Press.
- Afe, Adedayo Emmanuel (2012) The place of law and morality in pre-colonial Yoruba land: A case study of Akure. Canadian Social Science.