Getting credit for the right reasons

Capetonian Mannee Govender used credit from Capitec to save on his water bill and expand his ready-meal business.

Getting credit for the right reasons

Getting credit can benefit you in the long term, as long as you use it for the right reasons. Mannee Govender, a resident of Kraaifontein near Cape Town, is a good example of doing just that. Govender runs a business from home preparing ready-made meals and was looking for smart ways to lower his expenses. He knew that by growing his own vegetables, he could reduce the cost of buying fresh produce from other suppliers. However, he and his wife were concerned about the region’s water crisis; the resulting water restrictions, the rising cost of water, and how this would affect growing their business.


He needed his own water supply to cut expenses

Govender visited his nearest Capitec branch to apply for a personal loan of R20 000. Getting credit meant that he could establish a well point on his property and invest in a water storage tank. His credit application was approved immediately, and because of his good credit record, he was granted the lowest interest rate available.

Due to a shortage of plastic water tanks, Govender built his tank out of cement and established a vegetable garden to supplement his business using the rainwater he collected for irrigation. He also installed a well point so that he could legally access ground water. The family now only use municipal water for their drinking supply. All household plumbing and the veggie garden run on well water and stored rainwater. Govender’s business is growing, and so are the well-watered vegetables in his garden.

This is why Mr Govender’s choice to get credit, was for the right reasons:

  • He added to the value of his property by establishing a well point 
  • He cut his municipal water usage and reduced his bill by using stored rainwater and well water 
  • He expanded his business by growing his own fresh produce
  • He knew he could afford the fixed monthly repayments
  • He knew he would be able to pay the loan off quickly thanks to (a) a lower monthly municipal water account (b) reduced business expenses


Are you good for credit?

Credit can improve your life, as long as you are responsible and use it for the right reasons. Before you borrow money, ask why you want to borrow it – is it for a need or a want? Is credit the best way to pay for it? Can you afford the repayments? What must you give up to afford the credit payments? How stable is your income and employment?


Am I good for credit?

  • Will the credit uplift me financially, and get me closer to achieving my long-term goals?
  • Have I taken the first step to knowing my financial health – do I know what my credit report looks like?
  • With my current budget in mind, will I be able to afford the instalments for the duration of the credit agreement?
  • Can I afford to repay all my credit and still have money left over for emergencies?
  • Will the benefits of what I’m purchasing outlive the credit repayment period?
  • Do I know the exact amount I need before applying for credit?
  • Do I understand the full amount I’ll need to pay back when I add all the fees and interest?

If you answered “no” to any of these questions, you might need to rethink your decision to get credit.

More credit-related info here.

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