Over the past few months there have been talks about what I am going to rant about. It is about the Thai Government refinancing illegal debts. I thought it was a joke a long way back that a government would really take on the debts of people who had obtained money through ruthless loan sharks.
The Government Savings Bank took on registers yesterday, but numbers were well down on what were expected.
Here are some sob stories.
A grilled pork vendor stupidly went guarantor for some of her friends, this is probably the most idiotic thing you could do in thinking that they would repay loans. I have been to many repossession auctions, some people don’t even make the first repayments on their cars.
She was 200,000 in debt to sharks and apparently became ‘suicidal’, she goes on about the threats to her family from the sharks.
She was apparently paying 1,600 Baht interest every day. After paying 100,000 Baht in interest to one shark she now pays the principal loan off at 2,500 Baht per week.
Another complete idiot who owes 60,000 Baht and pays 20 – 30 % interest a month. She apparently ran into debt after hubby took off and she had to raise the kids alone.
And another debt holder went into hiding for a few months; the 1,800 Baht in interest each day (each fuc#en day 50,000 plus a month) was too much. This wise business man decided to start what Thailand is really short of, a grocery shop. I mean you only see one of these every, 5 metres down each road.
And the pick of the crop of bright sparks, a woman borrowed 140,000 Baht at 5% interest per month, to start a small business selling clothes, now clothes shops are so few and far between it is hard to see how it could have gone bad.
a 47-year-old man, said he owed Bt110,000 to Aeon, a non-bank credit provider, at interest of 28 per cent annually. Obviously he isn’t any good at maths, to know that this is totally exorbitant. For an Aeon card you need to use and X to mark the spot of just dribble on the form and you get your card.
Aeon is as bad as the sharks and need to be dragged over broken glass for these rates.
All in all though, the Thai government or powers to be really need to be flogged for supporting criminals. Illegal money lenders, after all are breaking the law. So the government supports law breakers, great!
Most of the sharks are more than likely to be the very people who were decisive in this scheme. I don’t mean to sound so negative and skeptical; Thailand doesn’t have a big problem with corruption, does it? (Okay stop laughing)
The other thing is this. How are these debts verified? The criminal (loan shark) waltzes into the Government Savings Bank with his old note book and all the debts scribbled down in pen. This has to be enough to show this illegal loan really exists. You can trust sharks; they are honest people just trying to make a living!
Now to the debtors, no matter how stupid, uneducated or illiterate you are, you must know that the rates charged are astronomical and complete robbery. When they take these large loans, there must be 99% of their brain knowing they are not going to be able to repay this debt and all it is going to do is bring so much trouble into their lives; they have to know this, don’t they?
Yes, some people are in dire straits and have no chance of a legal loan through a proper lending institution. The reason these institutions don’t lend money to these people, is simply because they are in the high risk category of not repaying the loan and have nothing to offer as collateral.
Should we sympathise for them? I don’t. There situation is terrible but they dug their hole deeper and deeper. Even if the way they came into debt is tragic, isn’t this just life dealing its cards?
The Government needs to enforce laws, not protect Hi-So Thais robbing other Thais of their money. Go after any person, no matter their stature in Thailand, if it is believed they are involved in these practices.
But with the way the well off protect each other and pay enough for others to turn a blind eye, this will never happen, not in my lifetime and probably never will. With kickbacks from sharks going to the very people who are meant to enforce and hold the Thai law in the highest regards, means many will never be touched and the vicious circle will continue.
The small sharks who loan small amounts to people are most likely to be caught, these cannot offer the same incentives as the ones loaning hundreds of thousands of Baht. When I see the small loan shark that has been busted and he was carrying 40 or 50K Baht, he is just a needle in a haystack.
That’s what I think and believe, anyway.
Brunty
3 comments:
In my experience, many rural Thai people are not good at managing their personal finances. They only consider the down-payment, not the repayments. So when their debt to a loan-shark is paid off, they will go straight back and borrow more.
Very sad.
Cheers,
Phibun Mike
Mike, rural Thais are not good at managing money. One of Noot's relatives had bought a fridge on money loaned from a shark that costs about 5,000 Baht in Tesco, she had to pay 500 Baht a month for 3 years. This is just absolute stupidity.
Rural Thais borrow and borrow again as you said and then pull their young kids out of school and send them off to work to pay off a debt they have accumulated.
One family sent their 14 years old to apparently work in a restaurant in Bangkok, I told the mother she was a disgrace for this.
Banks often don't provide loans to poor people - not because they are a bad risk, but - I suspect - simply because banks are large inflexible bureaucracies. A clerk in a bank just goes through their standard process which allows them to approve a loan for an overpriced middle-class home. Even if the bank gives him some leeway, he's much more likely to be punished for one bad loan of the 100 small loans he approved, then for leaving money on the table by not approving any of them.
Microloan organizations are quite successful and they don't actually have a problem with people defaulting. I think the Thai government should try to setup or support a microloan organization - that could help start small (or even tiny) businesses which can provide services and lift people out of poverty.
I often loan through kiv.org, but for some reason there are no loans from Thailand there. Don't really understand why that is the case.
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