My Money Mistake is a weekly PiggyVest series that explores the worst money mistakes real Nigerians have made, and the lessons they learnt from it.
For this week’s episode of My Money Mistake, we spoke to a small business owner who loaned her business partner some of their funds. She tells us about the origin of the loan, the impact on their business and how it affected their relationship.
Could you tell me about your money mistake?
I loaned one of my business partners some of our business’ funds when he had a money situation. He promised to pay it back in a week. It’s been seven months, and he still hasn’t paid back the loan.
Seven months? How did that happen?
By the debtor constantly promising and moving the deadline forward.
What exactly happened?
So he was in the middle of what he claimed was a money situation and had reached out, asking that the company loan him some money. He promised he was going to refund the money with interest the next week.
Every time I’ve followed up on the loan, it’s been one story or the other. Now, it’s been seven months. This loan still hasn’t been refunded. He’s not a stranger; he’s a co-owner of the business, so it never occurred to me that a situation like this would happen.
I didn’t think he would take advantage of the business like that.
How much did he borrow?
It’s about ₦100,000.
How has that affected the business?
It has stalled a lot of the operations of the business, including production. That was the amount we were supposed to use to produce a new set of tote bags for the business. So we can’t do anything about it.
What’s been the response from him?
He just keeps promising and defaulting.
Is he still a part of the business?
He’s no longer an active owner of the business. He moved to another country and started a new life somewhere else.
Was he in Nigeria when you loaned him the money?
Sort of. He was in the process of relocating when the loan came up. So it did feel like a genuine need.
Is the business moving on from the money?
We’re still a small business, so we definitely need the money and we’ve been following up as much as we can, but our hands are tied because we can’t even approach the person physically. I don’t want to embarrass him, but the business is really suffering because of this.
What have you learnt from this?
Regardless of your business – small or large scale – always ensure things are well documented. And sentiments should never get mixed with business finance.
Check back every Friday by 10 AM for a new My Money Mistake episode. Read the past episodes here. If you would like to share your story for the series, fill this form.