Prime Minister wants better protection for workers from loan sharks

[ASEAN NOW News]

Workers in a garment factory in northern Bac Giang Province. Photo by VnExpress/Hanh Pham

 

Prime Minister Pham Minh Chinh has asked the central bank and the Public Security Ministry to protect workers from loan sharks.

 

According to VN Express, the request was made after Chinh met with workers at the Convention Center in northern Bac Giang Province. The meeting was broadcast online in sixty-two provinces, cities, and headquarters of the Vietnam General Confederation of Labor.

 

Tran Thi Toan, 35, an official with the trade union of New Apparel Far Eastern Vietnam Co., Ltd. in Binh Phuoc, said black-market lending was a critical issue facing many workers.

 

She said that in recent times, many workers have been mired in financial difficulties due to the pandemic, but, unable to get loans from banks, they’ve had no choice but to turn to loan sharks.

 

As a trade union official, she has been "threatened and humiliated" by loan sharks as the workers at the company she worked could not pay back their loans, she said.

 

Senior Lieutenant General Luong Tam Quang, Deputy Minister of Public Security, admitted that loan sharks were committing very "sophisticated" crimes under the guise of businesses offering financial support services.

 

They would lend without collateral, lend in the form of capital mobilization, capital contribution, and business asset contribution, he said.

 

They usually entice workers to borrow money directly or through applications, social networks with "unusually" high interest rates.

 

"There are cases in which the interest rate is 90-100 percent month and even up to 700-1,000 percent month and loan sharks usually threaten, terrorize, appropriate assets when the borrowers fail to pay on the due date," he said.

 

In the past three years, the ministry has overseen more than 2,700 cases with 5,000 people involved and prosecuted nearly 2,000 cases with 4,000 defendants. Of those cases, workers are victims in more than 1,000 cases.

 

"We will review the business sectors in which workers are usually tricked by loan sharks to dismantle those rings," said Quang.

 

Deputy governor of the central bank Dao Minh Tu said the bank has a responsibility when workers must turn to loan sharks and cannot access the official sources.

 

To solve the issue, it is necessary to further improve the legal system so that credit institutions and commercial banks can let people borrow without applying complicated conditions and procedures, so that "workers can easily borrow a few tens of million [VND10 million = $430] to serve the essential needs in their daily life such as paying rent, cover medical expenses and their children’s school fees."

 

As directed by the central bank, each financial institution, FE Credit, a financial institution under VPBank, and a company under HD Bank, has committed a loan package of VND10 trillion with an interest rate that equals half of the market rate to serve the legitimate borrowing demand of workers.

 

The central bank will collaborate with the Vietnam General Confederation of Labor to make sure that workers with legitimate needs can get access to the loan package.

 

PM Pham Minh Chinh requested the central bank to produce solutions to make sure that official bank capital will come to the people in need, and guarantee appropriate scale and efficiency, which will contribute to preventing loan sharks.

 

Prime Minister Pham Minh Chinh speaks at a meeting with workers at the Convention Center in northern Bac Giang Province. Photo by VnExpress/Ngoc Thanh

 

The Ministry of Public Security, meanwhile, must quickly handle violators and prevent consequences affecting the economy and workers.

 

Also at the event, several workers have asked for support to attend skill training courses as some had faced difficulties when taking those courses, including the high tuition fees and the traveling cost.

 

PM Chinh said the demand to become skillful laborers was a "rightful" one and related units must prioritize resources to serve it.

 

The PM’s dialogue with workers attracted 4,500 workers in total, online or offline.

 

Several social issues, the need for preferential loans and other policies to support and incentivize workers.

 

Questions and proposals brought up at the meeting included several social houses, preferential loans, and policies to support and offer incentives for workers.

 

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