Isaan Money Lending

[jckei]

My girl keep telling me about this "fast" way to earn money in Isaan if you allready got some dough.

It's moneylending. That word freaks me out...

I want to know more if im even going to consider to help her start out with this (=give her a few K )

This is what ive been able to make out of her description:

Every sunday, something best described as the "village council" meets up and the people in her village area comes there to borrow/lend money. All the business that is going on is controlled by the "council" for the safety for everyone. The going rate is 5% a month. There is always collateral, most of the times farmland. It's made sure by everyone that the land is worth more than the amount being lended.

Well, my questions are... Does this sound right? Farmland as collateral... can that really be safe? Is there someone with own experiences with stuff like this?

It's not that I dont trust my girl, but her english is far from perfect so I just feel that I need some more information about this IF I decide to help her out.

Edited January 29, 2008 by jckei

[iono]

It's moneylending. That word freaks me out...

I want to know more if im even going to consider to help her start out with this (=give her a few K )

Well, my questions are... Does this sound right? Farmland as collateral... can that really be safe? Is there someone with own experiences with stuff like this?

It's not that I dont trust my girl, but her english is far from perfect so I just feel that I need some more information about this IF I decide to help her out.

I know that my Gr/Wife's sisters sit on this type of council and meet I think twice a year, all the people that borrowed money come back together to pay off the loan and then a lot turn around and reborrow, many have to borrow money from other sources to pay back this loan, however easily pay back the source when the village fund gives them their new loan. I think people who have money can contribute to this fund and receive interest on their monies and then recoup their funds at the end of the given time period, I would think the loan would have to be secured some how either by land or a solid government job or store, not sure if this is just a village initiated deal or part of a government thing (sounds more like a traditional village thing, I never asked her so don't know sorry not much help),

With that said my Grrrr/Wife has been lending money for years out of her own account, some people put up their land, others promise a portion of their crop instead of money, at times she will take rice so she is set for the year. So far so good, everyone has paid her back in one way or another with no hard feelings on either party.

[Globeliner]

Sounds like a recipe for disaster, don't do it !

[jckei]

It's moneylending. That word freaks me out...

I want to know more if im even going to consider to help her start out with this (=give her a few K )

Well, my questions are... Does this sound right? Farmland as collateral... can that really be safe? Is there someone with own experiences with stuff like this?

It's not that I dont trust my girl, but her english is far from perfect so I just feel that I need some more information about this IF I decide to help her out.

I know that my Gr/Wife's sisters sit on this type of council and meet I think twice a year, all the people that borrowed money come back together to pay off the loan and then a lot turn around and reborrow, many have to borrow money from other sources to pay back this loan, however easily pay back the source when the village fund gives them their new loan. I think people who have money can contribute to this fund and receive interest on their monies and then recoup their funds at the end of the given time period, I would think the loan would have to be secured some how either by land or a solid government job or store, not sure if this is just a village initiated deal or part of a government thing (sounds more like a traditional village thing, I never asked her so don't know sorry not much help),

With that said my Grrrr/Wife has been lending money for years out of her own account, some people put up their land, others promise a portion of their crop instead of money, at times she will take rice so she is set for the year. So far so good, everyone has paid her back in one way or another with no hard feelings on either party.

Thanks alot for your reply iono. Seems like my girl sumed it up for me about right then.... Perhaps i'll give it a try in a smaller scale at first, then if everything is going allright I might put some more cash into it.

Acording to my gf, the whole farm would be happy if more money is out there in circulation, more money to invest - more cropse. But I can't help to think that it's actaully 60% a year for the poor farmers to come up with... Ah, well - I trust they know what they're doing.

[Globeliner]

I would think you'd be 'thanking me' for my reply

[NovaBlue05]

I suppose its workable as long as they are providing collateral up front and squaring the loan up in an acceptable timeframe. It would be difficult for me to be a hardass in a default so the collateral would have to be something that Im comfortable they could afford to lose.

[dr_Pat_Pong]

I would think you'd be 'thanking me' for my reply

[ozzydom]

Highly illegal, there were recent headlines regarding a crackdown on illegal money lenders. you only need one disgruntled borrower to dob you in and you have big trouble .

The legal money lenders register the loan at the local Amphur and the loan is registered on the back of the Title Deeds,this actually becomes a transfer of title in case of non-payment.

The village loan fund is administered by the village headman/woman and a group of elected locals, the is the money provided by the Government , repayment days are usually twice a year, our local village fund puts on a 1% pm surcharge and this is used for village improvements such as concreting roads etc.

The headman/woman announces the arrival of new funds over the village loudspeaker system and its a mad rush to get there and borrow before the cash is all gone.

Our village also has a small loan scheme where people can borrow emergency cash in smaller amounts,this one has interest rates of 0%-3.95% per month dependant on the borrowers circumstances, this one I think is not exactly kosher.

[Dave the Dude]

With that said my Grrrr/Wife has been lending money for years out of her own account, some people put up their land, others promise a portion of their crop instead of money, at times she will take rice so she is set for the year. So far so good, everyone has paid her back in one way or another with no hard feelings on either party.

Hi jckei

Like the above poster, my wife lends out monies all the time, but in a more personal/not well organized fashion. Touch bamboo, we have never had problems except onetime when I lend someone funds that whilst got repaid in full, they were extremely late in repaying. That taught us a lesson in always agree not only an interest rate but a late payment rate too.

To speed the outstanding repayment up, I started playing the 'Vulture' and regularly surveyed the land/homes that were taken as collateral (Old habits die hard, I used to be a Bank Manger )

I WILL NOT dabble in this again and I think you should ask yourself one question and if the answers 'yes' Go Ahead

That is :-

WOULD YOU RISK YOUR VISA/RENEWALS FOR THE AMOUNT YOU WILL MAKE

I'll get of my soapbox now and have a Leo

GOOD LUCK

DAVE

[ray23]

These things are done all the time between Thai's remember something you are not Thai. It will be extremly obvious where the money is coming from.

It may be being done but that doesn't make it leagl, even if you have the greatest intentions.

Might as well accept it we have a different set of marching orders the Thai's.

I stopped doing volunteer activites simply becaue it put my visa at risk, never a problem until you upset the wrong person and then you are cannon fodder

[AYJAYDEE]

isnt it enough that thailand allows us to live here so easily? do we need to add to the misery of her poorest people by loan sharking??

[Cuban]

With these arrangements there is little control and the risk placed on the money "invested" is dependant on whose money is being lent. A Thai family with the head of the household having a reputation for being quick to anger is more likely to have money returned when the loan period is up than a farang who might not be living in the village.

If the amount loaned is sizable there is the temptation to leave and not return with the money, there are cases like this I have heard of from "our" village.

Also beware that there are different types of "loan" within the Thai Langauge, some are paid back, some without interest, some are in fact considered as gifts - but the word "loan" is used to save face.

[sezzo]

I know quite a few guys who have been talked into it.. The first couple of payments come and then nothing. Funny how most of the borrowers are family or distant family. After the money has been spent by them and they cant pay it back they just walk away and dont care. Mai Pen Rai

Dont do it

[Dave the Dude]

With these arrangements there is little control and the risk placed on the money "invested" is dependant on whose money is being lent. A Thai family with the head of the household having a reputation for being quick to anger is more likely to have money returned when the loan period is up than a farang who might not be living in the village.

If the amount loaned is sizable there is the temptation to leave and not return with the money, there are cases like this I have heard of from "our" village.

Also beware that there are different types of "loan" within the Thai Langauge, some are paid back, some without interest, some are in fact considered as gifts - but the word "loan" is used to save face.

Hi jckei

Good advice, I think from cuban.

Bear in mind that the average/poor Issanite has little idea of the 'big wide world' and probably thinks us ferangs have endless pots of money . With that in mind, if you were them would you want to rush to pay off a loan to a multi-squillionaire . I DON'T THINK SO! The people screaming and shouting around the village will be the first to be paid-off, with you at the end of the invisible Que.

Dave

[blizzard]

why dont u put yr gf on allowance. whatever interest she would have collected on lending yr money is her allowance.

this is one cas where farang shouldnt try to be thai.....................lol.

does one lose all senses when one decides to live in village?

[ozzydom]

My T/W dabbled in it for a while till she got burnt, that brought it home to her how risky it is so she quit.

Took me a while to work out what she was up to ,village women coming and going day and night,it was a keep the farang in the dark,one of those" you no understand Thai,s" stories .

She was lending 1000bt for 20 days at 60 baht per day repayment or 2000 bt at 140 bt per day repayment, a nice earner eh.,20% profit every 20 days.

Anyway she got suckered, a local lady borrowed 2k and paid it back in 3 days complete with 400bt interest (no deduction for early payment, then she asked for 5k, the wife thought Gee this is ok , the money came back in 4 days complete with 1k interest a day later she returned and wanted 10k ,she was such a good payer the wifey thought ,"why not", that night the lady boarded a bus to Bangkok and has not been seen since.

Turns out she pulled the stunt on quite a few of of the village lenders on the same day ,so she went off with a heap of dosh in her pocket.

Lesson learnt, wifey pulled the plug on her "enterprise".

[jckei]

Thanks for all feedback. Been usfull (Except Blizzard's reply, as usuall). I have to say this made me think a quite a bit.... Doing this in a larger scale is obviously not a wise thing to do.

[Dave the Dude]

Thanks for all feedback. Been usfull (Except Blizzard's reply, as usuall). I have to say this made me think a quite a bit.... Doing this in a larger scale is obviously not a wise thing to do.

Glad you have seen sense jckei.

Blizzard's replies usually have me 'in stitches' but I too, was a bit disappointed with this one. Keep em coming Blizzard your my hero

Remember, if its too good to be true, it probably isn't true.

Dave

[engrin]

I thought Blizzards avice was great

Most likely to have loan repaid in full his way

[soundman]

Highly illegal, there were recent headlines regarding a crackdown on illegal money lenders. you only need one disgruntled borrower to dob you in and you have big trouble .

The legal money lenders register the loan at the local Amphur and the loan is registered on the back of the Title Deeds,this actually becomes a transfer of title in case of non-payment.

The village loan fund is administered by the village headman/woman and a group of elected locals, the is the money provided by the Government , repayment days are usually twice a year, our local village fund puts on a 1% pm surcharge and this is used for village improvements such as concreting roads etc.

The headman/woman announces the arrival of new funds over the village loudspeaker system and its a mad rush to get there and borrow before the cash is all gone.

Our village also has a small loan scheme where people can borrow emergency cash in smaller amounts,this one has interest rates of 0%-3.95% per month dependant on the borrowers circumstances, this one I think is not exactly kosher.

Typical scenario - mad rush to get the cash.

Unfortunately there is never a mad rush to pay it back by the due date.

[farangnoi]

These things are done all the time between Thai's remember something you are not Thai. It will be extremly obvious where the money is coming from.

It may be being done but that doesn't make it leagl, even if you have the greatest intentions.

Might as well accept it we have a different set of marching orders the Thai's.

I stopped doing volunteer activites simply becaue it put my visa at risk, never a problem until you upset the wrong person and then you are cannon fodder

[farangnoi]

Thanks for all feedback. Been usfull (Except Blizzard's reply, as usuall). I have to say this made me think a quite a bit.... Doing this in a larger scale is obviously not a wise thing to do.

READ.....Doing not is a wise thing.

[jckei]

Thanks for all feedback. Been usfull (Except Blizzard's reply, as usuall). I have to say this made me think a quite a bit.... Doing this in a larger scale is obviously not a wise thing to do.

READ.....Doing not is a wise thing.

Yeah, you are right..

[jckei]

why dont u put yr gf on allowance. whatever interest she would have collected on lending yr money is her allowance.

this is one cas where farang shouldnt try to be thai.....................lol.

does one lose all senses when one decides to live in village?

I dont know if you are refeering to me..?

But if you would bother reading the first post, not just the topictext - you will see I, myself never intended to lend cash. My girlfriend wanted to. However, it concered me, since im the one giving her the cash to start up. That's why I asked here, and I got some great feedback and is not going thru with supporting this. Save your smart comments to some other thread where it actaully make sense, mate.

[TheWalkingMan]

My girl wanted some seed money for this type of enterprise I actually laughed and vetoed her ambitions As I had the feeling that she would be left holding the bag with a dud client.

TheWalkingMan

[blizzard]

dude you gonna lose yr munney sooner or later with yr logic.

you lending munney to yr gurl to lend is same same as you lendng munney directly.

we all saying same same, you are one silly farang if you even thought this was a good idea. how these low edukated village girls can take advantage of western edulated men i just dont understand.

smart peeple(countrywide financial) dont know how to lend munney to poor peeple and make munney, i doubt you could do it.................lol.

[Globeliner]

why dont u put yr gf on allowance. whatever interest she would have collected on lending yr money is her allowance.

this is one cas where farang shouldnt try to be thai.....................lol.

does one lose all senses when one decides to live in village?

Well you should know, being the village idiot.

[hp8000]

Blizzard is right. You will loose.

Would you lend money to perfect strangers in your homecountry ? No. So why here knowing that it can be used for gambling, drinking or ???

Keep your money and let the bank deals with such business.

[citizen33]

"smart peeple (countrywide financial) dont know how to lend munney to poor peeple and make munney, i doubt you could do it.................lol."

Apart from those in the world of sub-prime mortgages and apparently the FBI is right on their tails.

Edited January 30, 2008 by citizen33

[jckei]

dude you gonna lose yr munney sooner or later with yr logic.

you lending munney to yr gurl to lend is same same as you lendng munney directly.

we all saying same same, you are one silly farang if you even thought this was a good idea. how these low edukated village girls can take advantage of western edulated men i just dont understand.

smart peeple(countrywide financial) dont know how to lend munney to poor peeple and make munney, i doubt you could do it.................lol.

I'm just stunned. What is going on in your head..?