IN the 20th century, several innovative systems of buying and selling were evolved, such as hire purchase and online shopping.  These systems were all evolved by business interests and hire purchase is one of the oldest.  Since the authors of these innovations were business folk or those connected with them, the orientation of these systems tended to be weighted in favour of sellers and not the buyers/consumers as was the case with cooperativeism, whose roots are with the buyers and consumers in the 19th century.

Hire purchase dominates in the purchase of consumer durables and is welcomed by consumers, since it makes available many of the accoutrements of modern life which would never have been available to them in the short term.  Such consumer durables would include TV sets, refrigerators, blenders, electric mills, mixers, vacuum cleaners, various types of cookers and so on.  The acquisition of such consumer durables improves the quality of life.  The flipside of such a positive is that it could suck some purchasers into a whirlpool of debt, which engenders stress and tension and requires a great deal of self-sacrifice.

In addition, sellers often exploit buyers/consumers in a variety of ways: most consumers are unable to read or fully understand the contracts which may have clauses that favour the sellers above the buyers.  In many cases, the purchaser would have paid twice as much of the cost of the goods purchased and could have accessed loans at a much lower rate of interest and bought the item cash with the bank loan.  Sometimes, the seller is unable to service the item purchased, resulting in inconvenience and de facto financial loss to the buyer.  The seller may sometimes keep the item sent to him to be serviced for several weeks, thus deducting the purchaser’s guarantee or warranty time.

Items are repossessed after the purchaser would have almost completed paying for them.  There are cases where the consumer would have requested the seller to repossess the item purchased, but was dilatory in so doing and after the unpaid instalments had accumulated, sues the consumer.  These are some of the examples of the breakdown in hire purchase and the consumer is always the sufferer.  Accordingly, the consumer has a love-hate towards hire purchase.

The Government of Guyana has outlined its policy towards hire purchase and related financial legislation: it will offer immediate protection to consumers and effectuate longer-term modernisation, whereby the use of cash would be minimal.

At the beginning of the year, in February, the Minister of Tourism, Industry and Commerce,The Hon Oneneige Waldron, mentioned that the Hire Purchase Act was being amended to include purchasers being allowed to return goods within seven days;  this will take care of “compulsive buying” where a consumer bought an item or items which he did not need.  Also, the seller could not repossess an item without adequate notice, especially so when the purchaser would have paid most of his instalments.  Most importantly, the bill will mandate sellers to explain prices and procedures to buyers, whereby sellers would have to specifically declare the cash price, along with the hire-purchase cost for the same item.

Dr Ashni Singh, Senior Minister, Ministry of Finance, spoke in macro terms about the bill; “Buying on credit is a staple aspect of life in most modern and advanced societies . . . As we become increasingly a more modern society which is unavoidably going to be a society characterised by modern ways of doing business, including doing business on credit and by hire purchase, we must have a sound and legal framework that will facilitate those transactions and encourage more people to do such transactions, but in a predictable environment.”  Dr Singh then clarified and emphasised this observation by pointing out: “Disposable incomes are going to be increasing and people are going to want to acquire such items as vehicles and consumer durables for their comfort.”.

In this modernisation of the financial structure of the country, the amendments to the Hire Purchase Act are being coupled with amendments to the Fiscal Management and Accountability Act and the Small Business Act.