Delinquency has occurred when you’re behind on payments. It is inability to discharge a financial obligation as and when due. When delinquency is prolonged beyond a certain time limit, it results into default. It is pertinent to watch the delinquent growth rate for a healthy civil service.
The disposable income of an average civil servant gradually diminishes by reason of heavy financial commitment to loan repayments, both structured and unstructured loans. The interplay between the propensity to save and the propensity to consume (this is the ability of an income earner to commit certain percentage of his income to savings and to consumption respectively) determines the future financial status of the salary earner.
When salary of the future is mortgaged, particularly not on income generating asset, investment for the civil servant becomes zero and passive income at retirement will be zero. Unfortunately, a good number of civil servants still have dependants to cater for even after exiting the service. It, therefore, becomes valid to say that delinquency while in service poses a danger beyond the service years.
Mortgaging is a financial instrument for asset acquisition; this is an acceptable practice the world over. Standing institutions like the Federal Mortgage Bank should take on affordable housing scheme for civil servants, as mandated and by so doing provide justification for monthly salary deductions of concerned workers. This I believe will also help curb encumbrance. Where there are no functional institutionalized systems to help give salary earners a future, financial mismanagement is inevitable.
It cannot be overemphasized, however, the need for financial discipline on the part of the salary earner. Incessant borrowings and above repayment capacity is not only punishable by extant rules, it is detrimental to future comfort and rub the worker a relaxed life after retirement.
Due cognizance is not given to Maximum Credit Limit (MCL) before accessing loan facilities by most employees of government. I posit that financial orientation be conducted for staff in their early period of engagement before they get hooked to practices that are unacceptable by extant rules and also uneconomically beneficial to themselves.
