Johnny Smith has worked 20 days in the month and has almost made it to payday, but his expenses are higher than his disposable income due to bad budgeting. He needs a loan to make it to payday and uses a loan shark as its his only available option, he borrows R500.
At the end of the next month, John is told he now owes the loans shark R1000.
He realizes that he does not have the funds to repay the whole R1000, but only R250, the loan shark informs him that because he still owes R750, his next repayment will be R1500.
He is now stuck in a perpetual debt spiral.
Johnny Smith has worked 20 days in the month and has almost made it to payday, but his expenses are higher than his disposable income due to bad budgeting. He knows he has access to earned wage access and decides to access the R500 shortfall through the Kaelo Money platform.
On the 25th Johnny is paid his salary, with a deduction of R522, and has had a financial coaching session through Kaelo Money to assist him in managing his funds for the rest of the month.
He does not have any loan shark exposure, is not in a debt spiral and is learning how to budget and save effectively.
