The maths behind Kahungu's payday proposal

Every month, Selma Andreas waits for the message from her bank confirming that her salary has been paid.

It is a moment of relief, but only briefly, because the 38-year-old cleaner employed by Capital Cleaning Services knows the N$3 500 she takes home has already been spent long before it reaches her account.

Selma lives in a rented room in Havana with her two school-going children.

She leaves home before sunrise every weekday to catch two taxis to an office block in Windhoek's central business district, where she spends the day cleaning offices before making the same journey back home in the evening.

Like many workers, she supports two households separated by more than 700 kilometres.

The first payment she makes is N$1 200 for rent. Another N$700 is swallowed by transport, while N$900 disappears at the supermarket where cooking oil, maize meal, bread and soap seem to cost more every month. She spends about N$200 on prepaid electricity, but one payment matters more than all the others. Every month, she sends N$300 to her 69-year-old widowed mother in Okongo, who depends on the money to buy maize meal, cooking oil, sugar, and other essentials.

By the time she has bought airtime, contributed to the family burial society and dealt with the unexpected expenses that seem to arrive every month without invitation, the account is almost empty even though there are still days, sometimes weeks, before the next payday arrives, leaving her to wonder whether she should once again visit the micro-lender around the corner for a small loan to carry her through the remaining days of the month.

Selma thinks Swapo Women's Council secretary Francina Kahungu's suggestion that employers should consider paying workers twice a month to remove dependence on microlenders is a double-edged sword.

Instead of receiving N$3 500 once a month, she imagines receiving N$1 750 every two weeks.

The first fortnight immediately appears easier because she can buy groceries, pay for transport, top up her electricity, and send money to her mother without wondering whether she needs to borrow a few hundred dollars from the neighbourhood micro-lender first. Knowing another payday is only two weeks away gives her a sense of comfort she rarely experiences under the current system.

However, Selma realises that receiving money more often is not the same as receiving more money. She begins listing what it would actually cost for her family to live without constantly worrying about the next emergency.

Expenses

Rent remains N$1 200, transport N$700, groceries N$900, electricity N$200 and the monthly support she sends to her mother N$300.

She then adds N$300 for her children's school requirements, including stationery, uniforms and occasional school activities, N$200 for airtime and toiletries, and another N$400 to cover the unexpected costs that arrive almost every month, whether it is a clinic visit, replacing a pair of school shoes, contributing towards a funeral or helping a relative in distress.

To live modestly without constantly juggling bills, Selma would need about N$4 200 every month, yet her salary is only N$3 500, leaving a shortfall of N$700 before the month has even ended.

The micro-lender is not creating her financial problems, but is simply stepping into the N$700 gap between what it costs her family to live and what she earns.

When that gap appears, as it almost always does before the month is over, she either postpones paying someone, goes without something her family needs or borrows the difference, knowing that the loan, together with interest, will be deducted from the next salary, leaving the following month to begin with yet another deficit.

When the second N$1 750 arrives in her imaginary exercise, the landlord is still waiting for the full rent, the children still need food and school supplies, and taxi fares have not become cheaper.

The supermarket has not reduced the price of basic groceries. She quietly reaches her own conclusion.

"I think Madam Kahungu is trying to solve a real problem because maybe I would not rush to the micro-lender before month-end if another salary came after two weeks," she says. "But when I add everything together, I realise my biggest problem is not that I get paid once a month. The problem is that the cost of living has overtaken my salary by many kilometres. Whether I am paid once or twice a month, N$3 500 is still N$3 500. The gap between what I earn and what my family needs is what sends people to microlenders."

*This story uses fictitious names and salary figures.