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Work-and-pay, an arrangement allowing commercial drivers to acquire vehicles and work with it, while making payments for the vehicles within a period of time, is breaking the backs of drivers because of high interest rates charged by microfinance companies. Under the arrangement, the drivers make part payment of the vehicles, mostly second-hand (so-called home used) and work to pay the rest by instalment. However, because the microfinance companies charge between 48 and 50 per cent interest rates on the loans used to acquire the vehicles, the drivers are compelled to work beyond their abilities to make more money or �sales� to repay the loans. The drivers of some of the vehicles interviewed randomly in the central business district (CBD) of Accra complained of high interests on the loans acquired for their vehicles. While some said they were paying about 48 per cent per annum on the loans, others said they were paying almost 50 per cent. A driver thus ended up paying GHc30,000 for a home-used loan of GHc15,000 acquired for a vehicle with an interest rate of 50 per cent. The government also introduced the Youth in Driving module in an effort to assist young taxi drivers to pay for their vehicles under soft conditions. Under the programme taxi drivers were given brand new vehicles after the payment of a deposit of GH�3,000 and a daily payment of GH�30 (six days in the week) for three years but this programme has run into difficulties leaving the drivers with no option than to go to the microfinance companies for loans to purchase their cars. Executives of the Progressive Transport Owners Association (PROTOA) corroborated the testimonies of their members and appealed to those so inclined to step in with soft loans for drivers to ease their burden. The Chairman of PROTOA, Mr Ben Amoabeng, who is also the Chairman of the Ghana Road Transport Co-ordinating Council (GTRCC); the National Secretary of PROTOA, Mr Ebenezer Awuah; the National Treasurer, Mr Oppong Boateng, and the Greater Accra Regional Treasurer, Mr Lawrence Kangah, also appealed to the government to facilitate the acquisition of vehicles with lower tax duties and flexible repayment terms for their members to address a complex situation. They explained that PROTOA sometimes guaranteed the acquisition of the loans from the microfinance companies. However, the companies gave no rebates on the interest to the drivers. Sometimes too they advised their members against contracting loans from particular companies because of the harsh terms and conditions, but some of the drivers did not heed the advice, as they were in difficult circumstances and had no option. Therefore, the drivers had to either take the loans that went with high interest rates and harsh terms or leave them and resign themselves to unemployment. Tough conditions "We advise our drivers not to drive when they are tired. However, with the tough repayment terms and conditions, some realise that taking a rest would mean delays in their repayment schedule and further interests on the delayed payments, so they drive overtime, and in such situations accidents can occur," Mr Amoabeng said. Mr Boateng, giving an example of the harsh terms on the loans acquired, said PROTOA had contracted a loan to acquire some Sprinter buses for its members. He said drivers had to make weekly payments of GH�633 for three years. "With such a tight payment schedule, the driver has no option but to work overtime just to pay and also ensure some change for repairs on the vehicle," he pointed out. He said even after the driver had endeavoured to meet the terms, he would end up with a depreciated vehicle, while the payment, in the end, was more than double the value of the vehicle. Mr Kangah, for his part, narrated how some of the drivers had their vehicles impounded when they defaulted in payment. Sometimes, he added, when a driver could not make the payment due to a mechanical fault with the vehicle, the microfinance companies calculated interest on the default payment, making an already bad situation worse. Apart from microfinance organisations, drivers face similar stiff terms from private businessmen in the transport sector who buy vehicles and give them out to drivers to drive and pay for the cost, with the car becoming the property of the drivers after full payment has been made. The drivers have to cater for all the taxes, including the Vehicle Income Tax, relating to the operation of the vehicles as commercial vehicles. Kumi, a commercial driver, told the Daily Graphic that he had gone into one such arrangement with a private individual and was facing similar harsh conditions. He said in his case, there was only an oral agreement with the owner of the vehicle and the terms were that he would make weekly payments of about GH�300 for two years for him to own the car. Within that period, he had to ensure that the insurance cover and all other taxes relating to his use of the car for commercial purposes were paid for. He said he was told by the owner of the vehicle that he had the right to take back the car at anytime if he (Kumi) breached any of the terms or did anything that the owner frowned upon. A private vehicle owner, who gave his name only as Cosmos, defended the practice in the sector, saying the harsh terms came about because the drivers were recalcitrant and sometimes managed vehicles in a manner that depreciated their value fast. He said some drivers often drove without undertaking the requisite servicing of the vehicles, for which reason it was prudent on the part of those who financed the purchase of the vehicles to make the drivers partly responsible for their maintenance. Vanguard Assurance's model Some drivers, however, highly commended Vanguard Assurance for its initiative some four years ago when vehicles were acquired for drivers by the company on soft terms, with full insurance cover. The drivers said that had been a great help and the repayment terms were not burdensome. The Executive Vice-Chairman of Vanguard Assurance, Dr Gideon Amenyedor, when contacted, said the programme had been the company's social responsibility project. He said he was hopeful that Vanguard would introduce more innovations in the transport sector soon. Microfinance companies The microfinance companies contacted were tight-lipped over the issue. But some officials of some of the companies who did not want to be named explained that the big challenge for them was the risk of the non-payment of the loans advanced. They said the drivers most often defaulted on their loan repayment, did not maintain the vehicles and were inconsistent and unprofessional. That, they said, had resulted in a breach of trust, hence the high interest rates being paid by commercial vehicle owners. The officials maintained that their companies were private profit-making entities in an arrangement with commercial drivers who were also private profit-making individuals.