Recession ushers in culture of informal borrowing

OPINION:Loans from friends and family may become the norm – but how should we ask for a dig out?

HAPPY INTERNATIONAL Friendship Week” came the message from a business acquaintance in France along with one of those deeply annoying slide show attachments that can bring the computer crashing down.

A moving series of pictures of birds sitting on cherry blossom twigs, or feeding their young rolled across my screen, along with phrases in French that I struggled to translate, before having to call the IT crowd downstairs to get rid of it. The final screen freezing message, if I understood it correctly, was that if you can read the message in the first place, have some money in the bank, clothes to wear, a roof overhead and some bread to share with a friend then you are better off than 75 per cent of the world’s population. Rejoice and all that.

Yes, but it’s not really enough is it, says a friend, who calls up for a moan about the current situation. He stoically expects to be shafted in the mini-budget, with lumps taken out of his salary and some class of property tax inflicted on his portfolio of investment apartments – all of which have slipped into negative equity. He’s bracing himself for a big pay cut at work, or possibly a P45.

You have to laugh, he says mirthlessly. He still feels lucky compared to some. Two of his close friends have lost their jobs – one is in shock and cannot face the school run for fear of running into busy alpha males in their company cars, or busybody alpha females who can sniff a redundant dad at 50 paces; the other is rather bitterly helping his wife to make brownies for the local deli.

Talk of one casualty of the recession leads naturally on to another and another. Several people he knows actually don’t have jobs any more, their businesses barely registering a heartbeat. An old classmate admits that it’s down to just him and his wife in the office, and that she has taken over all the finances and cut up his credit cards. She gives him spending money in notes of small denomination and has told him to stop taking taxis and to reacquaint himself with the quality bus corridors.

In the midst of all these hard-pressed friends is one very wealthy individual, known since school days and very loyal to those in his network. He has now become a kind of Godfather figure. People go to meet him for a coffee and come away with a cheque to tide them over the loan repayments or the Revenue demand, no questions asked, no explanation necessary.

Easy for him, you might say, but not all rich people are so generous, and not all friends will help you out in a jam, as one supplicant found when his business went bust. When his collapse got a mention in the papers, the reaction from friends was surprising.

Some people he considered close texted rather than called, one or two didn’t even text and have avoided him ever since, while others he felt he hardly knew wrote sympathetic letters or offered work, the use of an office, a useful contact and even money.

With bank loans harder to come by, these informal transactions are likely to become more common, and it’s not just the super-wealthy who will be targeted. As the economy tanks, inevitably family and friends will turn to each other for handouts. It is hard to imagine what excruciating new etiquette is involved in putting the touch on a friend.

Possibly some race track experience might help – if you’ve ever sidled up to an owner or trainer inquiring of his prospects of a win, then you might already have acquired the right approach, which has to be as unobtrusive as possible. Once money has been handed over, the taker must on no account be seen to be flashing it around. The suitable demeanour is downcast.

Then what stance should one take when asked for a loan. At home, my father taught us to be generous. If a friend asks for money, give it, but do not expect it back. Otherwise, you could go slightly mad with resentment waiting for the money to be repaid. Catch them in a restaurant and they’ve practically taken the food from your own mouth. If they go on holiday, well who paid for the flights and the fancy hotel? Muggins here.

No, far better to consider the money a gift and be glad that you can help. My mother took a different view based on one of her favourite poems, The Ant and the Cricket. Anyone looking to borrow from the stash of notes in her dressing gown pocket was treated to a verse or two. In her day the poem, based on an Aesop fable, was taught in school and perhaps it should be still. It concerns a flighty cricket who sang and danced through the good times, and when hardship hit , went looking to the hardworking ant for a dig out.

“Says the ant to the cricket ‘I’m your servant and friend, but we ants never borrow, we ants never lend’.”

Shakespeare said something along the same lines.