Afghanistan Peace CampaignFor many small traders, buying goods on credit is part of doing business. It allows them to trade even if they do not have the money to pay for stock up front. However, that also leaves them vulnerable when deals go wrong, creditors demand repayment or the economy takes a downturn. Borrowing more money to cover a loss or settle an outstanding debt may offer temporary relief, but can also draw a trader into an intractable cycle of debt with far-reaching consequences. In this instalment of the Daily Hustle, AAN’s Hamid Pakteen hears from a car trader whose business initially prospered because dealers were willing to give him cars on credit. But after a series of losses, he found himself borrowing to repay what he already owed. He describes how mounting debts forced him to sell inherited land and cost him the trust of the very people who had helped his business prosper.
Most nights, the light in our living room stays on late. After everyone in my family has gone to sleep, I sit there alone with a sheet of paper, taking stock of my creditors and how much I owe each of them. I add up the figures over and over as if the numbers might somehow change if I count them again. Some evenings, when I hear people coming and going outside, I wonder if one of my creditors has come to my home to ask for his money.
There was a time when I was a self-assured trader in our local market. I bought and sold goods, mostly cars, and believed that, with a little more effort, I could build up my capital and put away a nest egg for the future. When someone trusted me enough to give me goods on credit, I took it as a sign that I had a good reputation. Today, I’m no longer that man. I’ve sold most of my assets and spent years struggling to repay my debts. What is hardest of all is that I’ve lost the trust of people who once believed in me. I think back to the first time I bought goods on credit. If someone had told me then that one day I’d be borrowing money to repay a loan, only to borrow again to pay that one back, I wouldn’t have believed them. But that’s exactly what happened.
How I first fell into debt
My name is Muhammad Wali. I’m 38 years old and was born in Ghazni city into a large household of 14 people, including my parents, two paternal uncles, two paternal aunts, four sisters, three brothers and me. Over the years, our family gradually grew smaller as my aunts, uncles and sisters married or moved away. My father married a second wife and, after living with us for a few years, moved with her to Kabul and later to Turkey. We never heard from him again. We only learned that he’d died when his second wife showed up at our house to settle the inheritance.
I was still at school when he left – my two older brothers worked and supported the family. But after a few years, they married and started their own households. They helped out when they could, but I had to put my plans to go to university on hold and start working to support myself and my mother.
When I was 20 years old, I joined some of my friends from Ghazni in Iran. I found work in a mechanic’s shop in Tehran and earned enough to support myself and send money home to my mother. Back then you could earn more in Iran and my employer gave me a place to live, so I even managed to put a little bit of money away for a rainy day, but I had to come back to Afghanistan when my mother arranged for me to get married. By then, my brothers and I had gone our separate ways. I spent the little money I had saved in Iran on the wedding and had to take whatever work I could find to make ends meet and support my mother and my wife. Then my mother fell ill and I had to borrow money to pay for her treatment. At first, she recovered, but she needed more treatment that we couldn’t afford, so I kept borrowing to pay for it. By the time my mother died, I was already in debt. By then, I had a family of my own – my wife, two daughters and two sons – and what I earned as a day labourer wasn’t enough to cover our household expenses and repay my debts.
From taxi driver to car trader
Then one day a friend gave me a car on credit. He told me I could work as a taxi driver and had a year to pay him back. The car changed our lives. I could finally earn a living and, little by little, things began to improve. Then I met a car dealer in Ghazni, who bought cars in Herat and needed someone to bring them to Ghazni and sell them and he asked me to work with him. I sold the taxi and paid back what I owed my friend. I worked with the car dealer for two years and learned the ropes before I started trading cars on my own. At first, I’d take one car at a time on credit, sell it for a profit in another province, mainly in Khost, Paktia or Kabul, and repay the dealer. Over time, as my business grew, so did people’s trust in me. Dealers started giving me one car, two cars, even ten cars on credit because they knew I would sell them and pay back what I owed. I didn’t worry about being in debt. The loans let me do business and I was sure I’d be able to repay what I owed. But things didn’t turn out as I’d expected.
Things took a turn for the worse when one of my creditors unexpectedly asked for his money back earlier than we’d agreed because he needed it for a family emergency. To pay him back, I had to sell a car for less than what I’d paid for it. I used the money from the sale to repay him, but the loss left me without the capital I needed to keep trading. I told myself that this was a temporary setback and that I would make up the loss on the next deal.
To keep my business going, I took another car on credit. This time, I had six months to pay for it. Six months seemed like a long time. I thought I could make enough money from a few good deals to cover my losses and pay back what I owed. But once again, I needed cash urgently and sold another car at a loss. I used the money to repay the six-month loan, but the loss left me with even less capital. I took another car on credit and borrowed more than before, hoping that a bigger deal would help me make up for my losses and turn a profit. Instead, I kept losing money and taking out larger loans. I was paying back one creditor after another, but each new debt was bigger than the last. Instead of getting out of debt, I was sinking deeper into it.
Buying more time
Before I knew it, this had become my way of life. Whenever a repayment deadline approached and I didn’t have enough money, I’d borrow again. Each new loan bought me a little more time, but it also left me with more debt. The economic situation became even more difficult after the Taliban returned to power. People had less money and very few were buying cars. My profits kept shrinking, just when I needed to earn more to repay my growing debts. Whatever I earned went towards paying off old debts, leaving me without enough money to keep trading or cover our household expenses.
Eventually, I stopped thinking about how much profit I might make that day. Instead, I worried about which creditor was waiting for his money and where I’d find the money to pay him.
When I finally sat down and added up everything I owed, I could hardly believe the total – five million afghanis (USD 77,600). I sat and stared at the paper for a long time. To me, that number meant far more than money. Behind those figures were deals, promises and sleepless nights spent worrying about who to pay and how. I thought about how I’d ended up in this situation. One small loan followed another, one losing deal followed another and one promise to pay tomorrow became a promise to pay the following week.
The cost of my debts
When I could no longer earn enough to repay my debts, I had to start selling what I owned. The hardest decision of my life was to sell the land I’d inherited from my father – land that had been in our family for generations. But my creditors wouldn’t wait and I had no other way to pay them. I sold the land one plot at a time and used the money to repay my creditors. Each time I sold a piece of land, I hoped the burden of debt would ease. But after paying my creditors, I’d add up what I still owed and realise that I was still heavily in debt.
As my debts grew, I also began to lose the trust of people who had once been willing to lend me money or give me goods on credit. People who had once been willing to do business with me on a handshake and a promise now asked what had happened to the money I already owed them. Some wouldn’t do business with me at all, while others would only deal with me if I paid cash up front. Sometimes, in the market, I’d see someone I’d known for years turn away as soon as he spotted me, trying to avoid me. That was when I realised I’d lost their trust and that their trust was worth more to me than money.
As the economy worsened after the Taliban returned to power, people had less money and my creditors were under more financial pressure. They started pressing me harder to pay them back. I understood their position. They’d lent me money and had every right to expect repayment, but I simply didn’t have enough to pay them. Eventually, some of them lodged complaints against me and the police called me to come to the station. I explained to them that I wasn’t trying to avoid paying my debts. I was doing my best to repay everyone, but I needed more time to earn enough money. The police spoke to my creditors and persuaded them to give me more time to pay back what I owed.
Someone looking at my situation from the outside might ask why I kept borrowing when I knew it was making things worse. But when a creditor was waiting for his money, I could think only about how to get through that day. I wasn’t thinking about what would happen tomorrow.
Still paying the price
Looking back, I wish I’d stopped taking out one loan after another and believing that the next deal would bring in enough money to clear my debts. Maybe then things wouldn’t have got so bad. My debts have cost me more than money. I have sold much of the land I inherited from my father, damaged relationships and lost the trust of people who once did business with me.
I’ve managed to pay back a bit more than half of what I owed, but I still owe two million afghanis (USD 31,150). I’ve started working as a day labourer a few days a week. It’s good, honest work, but I don’t find work every day, so I still trade cars, although now I only buy a car when I know I have a buyer. Sometimes, I still have to borrow money, but I’m much more careful now. Before taking on any new debt, I think about how much I can realistically afford to repay.
I still hope that one day I’ll pay off my last loan and there’ll be no creditors’ names left on my list. I want to live without fearing what tomorrow will bring and regain the trust I’ve lost.
What worries me most is what my mistakes might mean for my children’s future. Who will want to marry my daughters when their father is known as a debtor? How will I afford my sons’ weddings? I’m especially worried that my sons might have to leave school and start working to help me repay my debts. I don’t want that to happen. My children shouldn’t have to give up their education or their futures because their father made bad decisions.
Above all, I want my children to have a different life from mine. I want them to finish their education and build their own futures without worrying about the debts I’ve left behind. I hope they’ll learn from my mistakes, especially the importance of keeping their word and not making promises they can’t keep. These are lessons I’ve learned the hard way and I hope I can show them that it’s possible to make a living without falling into debt as I did.
Edited by Roxanna Shapour and Jelena Bjelica