Isaan Money Lending

[Gary A]

My wife got involved pretty much by accident. A friend of hers was in hock to the local shark. The loan was secured with a chanote (land paper). The lady who was in hock was about at the end of her rope. She was paying seven percent per month interest. YES, that's correct. Seven percent per month. I was worried about my wife involving herself with the loan shark's business but my wife wasn't worried about that. My wife loaned the lady the money and went personally with the loan balance to pay off the shark. My wife came home with the chanote. My wife charged the lady three percent per month and told the lady to try to sell part of the land. That happened within a year, the loan was paid in full and everyone is happy. Since then my wife has many people coming to see her for a three percent loan. She doesn't have near enough money to satisfy the demand but keeps her entire savings loaned out. I DID say HER savings, not my money. Up to her.

[jaede]

The rate in ISSAN is 20% mate me thinks she is trying to short change you. Some people in my wife's village even charge 20% a day!!!!!!

Point is the minimum return you should be looking at is 20% for 5% you better off with a UK or Aussie bank account

[MISTERBONK]

The rate in ISSAN is 20% mate me thinks she is trying to short change you. Some people in my wife's village even charge 20% a day!!!!!!

Point is the minimum return you should be looking at is 20% for 5% you better off with a UK or Aussie bank account

You need to compare like with like. The 20% Isaan rate you quote is per month whilst the 5% bank account rate is per year. The ratio is therefore 240% to 5%

However 20% monthly rates are the exception. These are the rates quoted to people that you have severe doubts about, and it is better to avoid them altogether. 5% a month is more the norm, with many loans arranged for around 3% a month. Still far better than Thai banks savings accounts of 0.75% a year

[Shotime]

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

I can't read anymore of this, but it can only go one place. They should have an AA for guys with Thai GF's. T&A might work or wok.

Edited May 17, 2008 by Shotime

[feffejonsson]

My wife involved me in the money lending business four years ago. Mostly we lend money for family but also for some other people in the village, it´s a small village everyone seems to be related somehow. We charge 3% a month for non family and 1,5% for family. No one has ever so far missed a payment.

Everyone is happy and grateful that the interest we charge is so much lower than the interest most other charges.

I only have good experiences from the money lending business. I guess it depends what family you married in to and where you are staying.

Moneylending is not frowned upon in Thailand as it is in Europe or the US.

Cheers

[corkman]

..... a semi anecdotal take on this..... which in a "black comedy" type way I find quite comical, in a satirical sort of way...... it is of course not funny, but it has an air of Monty Python about it......

It generally seems to go like this:

Person 1 needs money - 10,000 baht. So they go to Person 2 who agrees to lend it to them at the usual rate (20%).

Person 1 then spends the money, defaults on the first "payment" and ends up in a bit of a dilema. So they go to person 3 - "can I borrow 10,000 baht".

Person 3 agrees at the usual rate, so person 1 then has 10,000 baht in their hand. Meanwhile, a 4th person approaches person 1. Now, seeing how person 1 has just bought a new motor bike, it is going around teh village that he has come into money and is doing ok. So Person 4, who needs a few bob, approaches person 1 (who is currently holding 10,000 baht in his hand - the second loan) for a loan.

Being the sly fox that person 1 is, rather than paying back the original 10,000 baht, cutting his losses, and acknowleging that is is now a further 4,000 baht down in interest, he instead agree's to lend person 4 half the money (5,000 baht) at the usual rate - and decides to pay peson 2 (the original lender) 5,000 baht to appease him for the time being, and besides it gets him 3 months ahead on payments - meanwhile relying on person 4 to pay him, so he in turn can pay person 3 (the second debtor).

This "robbing Peter to pay Paul" situation goes on for a while - the original person 1 finds that he does not have the capacity to pay the orignal loan, let alone the second loan. He is now in debt to the tune of 15,000 baht plus 4,000 baht interest, totallying 19,000 baht..... but he justifies it, and openly brags about how person 4 will be paying him back 5,000 baht plus interest - so he's made 1000 baht "profit"

Meanhwile, person 4, who owes the 5,000 baht is all cut up inside and green with envy at how his lender (person 1) is going to make 1000 baht profit from him, for nothing - so it would seem. So, he wants in on the action - where does he go...... to the same guy that person 1 went to in the first instance i.e. person 2.

Seeing as person 2 is doing well from previsous endeavours, after all he has recouped 5,000 of 10,000 debt, and is promised the rest next month, and the interest the following month, then he thinks it might be a good business opertunity to lend another guy a further 10,000 baht........ So he lends person 4 the money, who in turn, in his infinite wisdom decides to pay 3,000 baht to person 1 (off the 5000+1000 interest), putting him 3 months ahead of payments - he lends 5,000 to someone else (then his interest is mitigated) and is left with 2,000 baht..... which gets squandered, to celebtrate his new venture, and show off to his friends how well he is doing.

So, it now looks like this:

Person 1: borrowed 20,000 baht, plus 4000 interest = 24,000. He's paid back 5000 to one guy, 3000 to another, so is now in debt to the tune of 16,000.

Person 2: loaned out 20,000 baht - he's seen 5,000 back - so he's owed 15,000 plus 4,000 interest that he'll never see.

Person 3: Loaned out 10,000 baht - he got back 3,000 - including interest the ballance is 7000 + 2000 = 9,000.

Person 4: Borrowed 15,000 baht - paid back 3,000..... but has to pay 3000 in interest - so still owes 15,000

After a while, it quickly goes pearshaped - the orignal two lenders now need their money - the two borrowers ain't got it - the people they lent it two ain't got it..... so what will they do? They go to the village elder of course - out council - or whatever you want to call them..... and being good upstanding memebers of the community, are given the money...... at the usual rate of course..... so at least they have broke even..... IF they EVER get the money back

Time goes on - and of course no one can pay any of the debt - so then the land starts coming into the equation....... when my "Granny dies I will have 2 Rai" so that gets promised and is signed into a book and whitnessed somewhere..... of course the land is useless - you could sell it, but who would buy it? Someone will buy it off you, and they will give you the money next year when they sell something else...... that no has teh moeny to buy either.....

Further still, time goes on - person 1 owes person 2 his land, person 1 also owes person 3 his land (and its probably the same piece of land, which he doesn't yet even own). But not to worry, person 4 owes person 1 HIS land..... so that mitigates some of the "land owning"..... but wait - person 4 also owes person 1 land too....... meanwhile, to secure the village best, the original lenders have had to put up their land....... but they are not worries, because when it comes time to collect, the land they are colelcting on is worth more than their own, so they'll "profit" from it - little do they know the land secures several loans, not just theirs.

Finally, the infamous granny dies, the land gets divided up, but the peice of land that person 1 gets is at the back, and has no road frontage...... drama dram drama..... no what will they do????? So, it occurs to them, they will "buy" the land off their siblings (who they thmselves owe money, and have coutned this chicken well before it hatched) and then sell the whole plot, at a huge profit of course, to someone else who doesn't have the money......... so another half dozen contracts are drawn up - indebting each others land all over the place, with promises of interest and god knows what in between...... So peson 1, our protagonist has, through "good luck" (because he's a good man) is now a big land owner....... unable to sell the land, he of course hatches another cunning plot...... he's going to plant rubber tree's..... it will take 7yrs to get money back, but when that happens - he'll be rich....... of course there is one problem..... he lacks the capital investment - but being such a good business proposition, he takes it to the village council. This will bring money and employement to the area, so they naturally give it their endoresement, and put up 100k baht.......

At this stage, person 1 is doing really well for himself. He has amassed land, and wealth, and is embarking on a great new business venture. All he has to do is pay back the 16,000 baht to the original lenders (who themselves now owe alot more than that at this stage) and he's then in the clear. And instead of actually paying his siblings for the land, he is going to offer them a once in a lifetime opertunity to get into the rubber tree busniess - which they grab with both hands......

A couple of years go buy, no one has the money to pay for the irrigation and fertilizer - all the sons that were supposed to work the fields have been forced to find other jobs to make ends meet...... the whole thing crashes and burns - the land is given to the village council, who them need to sell it for about 200k baht to clear the debt.... but the land is only worth about 100k, and anyone that would buy it would first have to borrow the money from the council ......... but wait, their could be a win win solution here for everyone.........

Plan A - rope the farang into the loan sharking business...........

Plan B - get farang to buy the land at the inflated price............

Neither Plan A or Plan B is done with any cynicism - it is genuinly done is good faith (and ignorance) on the part of most people involved....... but in both situations the outcome is the same - the farang ends up with the land, and ends up paying, one way or another, 200k for it. How does this happen - well he either buys it outright for 200k, or if he opts for plan A - when payments aren't made, he is offered teh land as collateral..........

Mr. farang then starts thinking about rubber tree's himeself. He's been on Thaivisa.com, checked it out (take one look in the agricultural forum), and reckons why not - for an extra couple of grand he could actually turn this situation to his advantage.........

The saga continues........................

Sound familiar to anyone??? My wife always used to wonder why I wouldn't get involved....... a couple of years later, living in the west, with a little bit of education on economics etc. and she now see's the point........ which her parents, thankfully, are now learning......

[MISTERBONK]

..... a semi anecdotal take on this..... which in a "black comedy" type way I find quite comical, in a satirical sort of way...... it is of course not funny, but it has an air of Monty Python about it......

It generally seems to go like this:

Person 1 needs money - 10,000 baht. So they go to Person 2 who agrees to lend it to them at the usual rate (20%).

Person 1 then spends the money, defaults on the first "payment" and ends up in a bit of a dilema. So they go to person 3 - "can I borrow 10,000 baht".

Person 3 agrees at the usual rate, so person 1 then has 10,000 baht in their hand. Meanwhile, a 4th person approaches person 1. Now, seeing how person 1 has just bought a new motor bike, it is going around teh village that he has come into money and is doing ok. So Person 4, who needs a few bob, approaches person 1 (who is currently holding 10,000 baht in his hand - the second loan) for a loan.

Being the sly fox that person 1 is, rather than paying back the original 10,000 baht, cutting his losses, and acknowleging that is is now a further 4,000 baht down in interest, he instead agree's to lend person 4 half the money (5,000 baht) at the usual rate - and decides to pay peson 2 (the original lender) 5,000 baht to appease him for the time being, and besides it gets him 3 months ahead on payments - meanwhile relying on person 4 to pay him, so he in turn can pay person 3 (the second debtor).

This "robbing Peter to pay Paul" situation goes on for a while - the original person 1 finds that he does not have the capacity to pay the orignal loan, let alone the second loan. He is now in debt to the tune of 15,000 baht plus 4,000 baht interest, totallying 19,000 baht..... but he justifies it, and openly brags about how person 4 will be paying him back 5,000 baht plus interest - so he's made 1000 baht "profit"

Meanhwile, person 4, who owes the 5,000 baht is all cut up inside and green with envy at how his lender (person 1) is going to make 1000 baht profit from him, for nothing - so it would seem. So, he wants in on the action - where does he go...... to the same guy that person 1 went to in the first instance i.e. person 2.

Seeing as person 2 is doing well from previsous endeavours, after all he has recouped 5,000 of 10,000 debt, and is promised the rest next month, and the interest the following month, then he thinks it might be a good business opertunity to lend another guy a further 10,000 baht........ So he lends person 4 the money, who in turn, in his infinite wisdom decides to pay 3,000 baht to person 1 (off the 5000+1000 interest), putting him 3 months ahead of payments - he lends 5,000 to someone else (then his interest is mitigated) and is left with 2,000 baht..... which gets squandered, to celebtrate his new venture, and show off to his friends how well he is doing.

So, it now looks like this:

Person 1: borrowed 20,000 baht, plus 4000 interest = 24,000. He's paid back 5000 to one guy, 3000 to another, so is now in debt to the tune of 16,000.

Person 2: loaned out 20,000 baht - he's seen 5,000 back - so he's owed 15,000 plus 4,000 interest that he'll never see.

Person 3: Loaned out 10,000 baht - he got back 3,000 - including interest the ballance is 7000 + 2000 = 9,000.

Person 4: Borrowed 15,000 baht - paid back 3,000..... but has to pay 3000 in interest - so still owes 15,000

After a while, it quickly goes pearshaped - the orignal two lenders now need their money - the two borrowers ain't got it - the people they lent it two ain't got it..... so what will they do? They go to the village elder of course - out council - or whatever you want to call them..... and being good upstanding memebers of the community, are given the money...... at the usual rate of course..... so at least they have broke even..... IF they EVER get the money back

Time goes on - and of course no one can pay any of the debt - so then the land starts coming into the equation....... when my "Granny dies I will have 2 Rai" so that gets promised and is signed into a book and whitnessed somewhere..... of course the land is useless - you could sell it, but who would buy it? Someone will buy it off you, and they will give you the money next year when they sell something else...... that no has teh moeny to buy either.....

Further still, time goes on - person 1 owes person 2 his land, person 1 also owes person 3 his land (and its probably the same piece of land, which he doesn't yet even own). But not to worry, person 4 owes person 1 HIS land..... so that mitigates some of the "land owning"..... but wait - person 4 also owes person 1 land too....... meanwhile, to secure the village best, the original lenders have had to put up their land....... but they are not worries, because when it comes time to collect, the land they are colelcting on is worth more than their own, so they'll "profit" from it - little do they know the land secures several loans, not just theirs.

Finally, the infamous granny dies, the land gets divided up, but the peice of land that person 1 gets is at the back, and has no road frontage...... drama dram drama..... no what will they do????? So, it occurs to them, they will "buy" the land off their siblings (who they thmselves owe money, and have coutned this chicken well before it hatched) and then sell the whole plot, at a huge profit of course, to someone else who doesn't have the money......... so another half dozen contracts are drawn up - indebting each others land all over the place, with promises of interest and god knows what in between...... So peson 1, our protagonist has, through "good luck" (because he's a good man) is now a big land owner....... unable to sell the land, he of course hatches another cunning plot...... he's going to plant rubber tree's..... it will take 7yrs to get money back, but when that happens - he'll be rich....... of course there is one problem..... he lacks the capital investment - but being such a good business proposition, he takes it to the village council. This will bring money and employement to the area, so they naturally give it their endoresement, and put up 100k baht.......

At this stage, person 1 is doing really well for himself. He has amassed land, and wealth, and is embarking on a great new business venture. All he has to do is pay back the 16,000 baht to the original lenders (who themselves now owe alot more than that at this stage) and he's then in the clear. And instead of actually paying his siblings for the land, he is going to offer them a once in a lifetime opertunity to get into the rubber tree busniess - which they grab with both hands......

A couple of years go buy, no one has the money to pay for the irrigation and fertilizer - all the sons that were supposed to work the fields have been forced to find other jobs to make ends meet...... the whole thing crashes and burns - the land is given to the village council, who them need to sell it for about 200k baht to clear the debt.... but the land is only worth about 100k, and anyone that would buy it would first have to borrow the money from the council ......... but wait, their could be a win win solution here for everyone.........

Plan A - rope the farang into the loan sharking business...........

Plan B - get farang to buy the land at the inflated price............

Neither Plan A or Plan B is done with any cynicism - it is genuinly done is good faith (and ignorance) on the part of most people involved....... but in both situations the outcome is the same - the farang ends up with the land, and ends up paying, one way or another, 200k for it. How does this happen - well he either buys it outright for 200k, or if he opts for plan A - when payments aren't made, he is offered teh land as collateral..........

Mr. farang then starts thinking about rubber tree's himeself. He's been on Thaivisa.com, checked it out (take one look in the agricultural forum), and reckons why not - for an extra couple of grand he could actually turn this situation to his advantage.........

The saga continues........................

Sound familiar to anyone??? My wife always used to wonder why I wouldn't get involved....... a couple of years later, living in the west, with a little bit of education on economics etc. and she now see's the point........ which her parents, thankfully, are now learning......

Well researched post, and I don't doubt that what you have written can and does happen. However it is rather extreme.

By taking great care , investigating and knowing the people that you are proposing lending money to pays dividends. Plus always requiring a guarantee (land gold etc) invariably means the debt and interest will be repaid.

Every village has its shysters -those who borrow and will never repay. They become well known, and must be avoided. But for most, with the threat of losing their guarantee, being exposed in their communities as bad debtors, and probably being unable to ever borrow again, (a regular necessity here in Isaan) there is very little chance that the lender will lose.

[coventry]

Every village has its shysters -those who borrow and will never repay. They become well known, and must be avoided. But for most, with the threat of losing their guarantee, being exposed in their communities as bad debtors, and probably being unable to ever borrow again, (a regular necessity here in Isaan) there is very little chance that the lender will lose.

Misterbonk I agree that every village has it's shysters but I seem to have landed in the manufactures mould in where I live. I am owed monies by people, who were reportedly respectable, by my wife. Even she can't believe what they've done to us financially. Yes I took out guarantees ie the land papers etc. But they're not worth a salt if you haven't got a Khai Fark agreement. There is nothing to stop them going to the land registry and applying for a new set after a little bureaucracy.

On repayment of some monies that I was owed there wasn't one person that didn't default, in one way or another. I tried lawyers, physical, along with verbal threats but to no avail. I tried to get a Reng Rat Nee company to recover my dues but I was unable to find such a company. Not only that, one debter told me "how can they get money out of me that I don't have ? The car is on finance and the house belongs to other family members". They actually don't give a shit about being labeled a bad debtor, as Misterbonk says. If they did, I'd have been paid back by now.

Treat all Thais as being lying devious scum, even though some aren't, and don't lend them money no matter who they are and how well you know them.

Edited May 28, 2008 by coventry

[bergen]

As one experienced member from Loei regularly advise - don't spend more money than you can walk away from - and the same goes with lending anything to anyone - especially in Thailand!

[coventry]

I can walk away from it but why should I ? I worked dam_n hard for that money. It wasn't given to me and I wasn't born rich, as most Thais seem to think.

Edited May 28, 2008 by coventry

[Gary A]

I DON'T loan money to anyone. The last three times I did loan money was to farangs. Guess what? None of the three has repaid me and I doubt that I'll ever see the money. One was basically and still is a thief. Another had a business and his business flopped even though it had great potential. He can't afford to pay me back. The third is a drunk but the amount of money was only 5,000 baht, he wanted 10,000. I really didn't expect to get it back and since he won't bother me any more, I consider it money well spent.

[MISTERBONK]

Treat all Thais as being lying devious scum, even though some aren't, and don't lend them money no matter who they are and how well you know them.

I certainly sympathise with you, but have to say that my experience over 5 years has been very positive. Only 1 default of 300bt. We currently lend to over 60 villagers -mostly small amounts-and they mainly need it for fertiliser for their rice, or for the new school term, all agreeing to repayment when the rice is harvested. We never lend money to repay gambling debts, or to known gamblers or alcoholics (accepting that all the villagers play the lottery and drink a bit of lao cow)

In my village they know that they will need to borrow every year, so they pay back. If they didn't pay back, there would be a problem growing their rice in subsequent seasons as nobody would lend them money.

I am not familiar with a Khai Fark agreement, and have found nothing on google. Please advise further.

[coventry]

Treat all Thais as being lying devious scum, even though some aren't, and don't lend them money no matter who they are and how well you know them.

I certainly sympathise with you, but have to say that my experience over 5 years has been very positive. Only 1 default of 300bt. We currently lend to over 60 villagers -mostly small amounts-and they mainly need it for fertiliser for their rice, or for the new school term, all agreeing to repayment when the rice is harvested. We never lend money to repay gambling debts, or to known gamblers or alcoholics (accepting that all the villagers play the lottery and drink a bit of lao cow)

In my village they know that they will need to borrow every year, so they pay back. If they didn't pay back, there would be a problem growing their rice in subsequent seasons as nobody would lend them money.

I am not familiar with a Khai Fark agreement, and have found nothing on google. Please advise further.

I live in a village similar to yourself Misterbonk where people borrow from season to season to just keep their heads above water. Without going into too greater detail, more or less everyone defaulted once they got their harvest in. I think it's because once they have money they find it hard to give someone else, even though they owe it. The kids will be riding about on new bikes. The men will be drunk most days. They make down payments on new motorbikes/cars, knowing they wont make anymore paymment other than the initial one. Later having the bike/car reposesed. But when I go for payment they just smile and make excuses. Yes I have their land papers but they're no use without a Khai Fark agreement. A Khai Fark agreement is a contract that in the event of the debtor defaulting you automatically take the item that was put up as the asset for the loan. Also a word of caution in that it is illegal to lend money in Thailand at an higher rate than 1.2% per month or 15% per year. To avoid payback they can take their case to the police and you are in deep shit. They will walk away smelling of roses. 3% is the local current rate but as I've said rub them up too much and they'll cancel the debt by complaining to the police. The ball seems to always be in their court. By the way Misterbonk you didn't Google Reng Rat Nee and come up with any answers did you. They are about but I can't locate one.

Edited May 28, 2008 by coventry

[MISTERBONK]

A Khai Fark agreement is a contract that in the event of the debtor defaulting you automatically take the item that was put up as the asset for the loan. Also a word of caution in that it is illegal to lend money in Thailand at an higher rate than 1.2% per month or 15% per year.

By the way Misterbonk you didn't Google Reng Rat Nee and come up with any answers did you. They are about but I can't locate one.

We use a similar agreement, drawn up by a lawyer for every loan over 2000bt. (the original wording that is - we adapt it to meet circumstances) We give 2 month leeway for any repayment due plus interest otherwise it is off to the specified court. They know that if they lose they will have to pay the court costs, but so far it has not been tested. Sure we are far harder on them than other lenders, but we give preferential interest rates in return. We spell out the penalties to them very clearly before they take the loan

I was led to believe the maximum loan rate was 28% per year. certainly 3% a months is in excess of this.

One thing we do differently is that we lend the money for "x" months, and require a fixed proportionate repayment to be made every month + a reducing interest. This they seem to like, and can manage a repayment of 1000, 1500 or 2000bt a month + interest. If they want to pay back one time, then we send them elsewhere. As you say once the rice is harvested the last thing they want to do is repay loans.

I assume a reng rat nee is a debt collector. Never come across one - usually the family heavies go in for repayment but will investigate

Edited May 28, 2008 by MISTERBONK

[corkman]

Well researched post, and I don't doubt that what you have written can and does happen. However it is rather extreme.

By taking great care , investigating and knowing the people that you are proposing lending money to pays dividends. Plus always requiring a guarantee (land gold etc) invariably means the debt and interest will be repaid.

Every village has its shysters -those who borrow and will never repay. They become well known, and must be avoided. But for most, with the threat of losing their guarantee, being exposed in their communities as bad debtors, and probably being unable to ever borrow again, (a regular necessity here in Isaan) there is very little chance that the lender will lose.

Yes Misterbonk - I must concur, it is a little extreme - and not entirely factual, but rather representing a couple of situations that I am aware of in my wife's village at the moment - a sort of bastardisation of a few stories if you will.....

If you run it as a proper business (and I have not idea about the legalities of that) and enforce it properly, then I am sure it could be quite lucrative - especially if you are lending small amounts to reliable people for worthy things like rice fertilizer etc. It is just the stories I have heard - if you trace them back - alot of the time it seems that the money is to pay off an old debt from a failed 'catfish pond' endeavor, or a couple of rai worth of rubber trees that didn't work out, or a fine that someones husband has incurred for god only knows what, or to pay off a motorbike that the son crashed while he was drunk...... not that they will be forthcoming with that info, and alot of the time they do not see it as the root cause of their financial worries..... quite often they want to invest in something so that they can work their way out of debt in an honourable way and its "can we have money to start a business" or "save a business" which is probably gonig to go downhill too..... I can see the sense when it is a seasonal thing - like a few thousand baht for fertilizer for a practically gauranteed crop....... it is a totally different situation.

As an adendum to my original post - please take note that I did not intend that to represent every household in Isaan's policy on lending money etc. It is just indicative of a couple that I have come across, and to be honest such occurance come about, in my humble opinion through ignorance and complete lack of education on even the most fundamental economics of anything...... I do believe that people just don't relaise what they are getting themselves into, get themselves into something in good faith, and end up in a right mess....... I don't think it is part of an elaborative co-operative "scam the farang" scheme or anything - its just how things all too often (but not always) turn out - IN MY EXPERIENCE .......... maybe its just that I only get told the bad stories, and enver get told the good ones?????

None the less, it is why I always reply with a firm but polite "no" when I am every approached for a loan, for an investment opertunity, or any such endeavor. I am blue in the face from telling the Mrs. "do not tell people you cannot help them because you have no money" - it is a blatent lie, and everyone knows it. Simply tell them that you cannot lend money without paying interest, and that I will not accept high interest payments and get rich off the backs from friends and family because it is bad luck and its bad business. That is a lie too - it is not bad business, but it lets them in a no-no situation, without anyone loosing the all too important "face".

I don't know enough about the whole concept to pass judgement whether it is morally right or wrong, OR whether it is good or bad financial sense. All I know is this - I personally would not have the stomach for enforcing payment if people were to default on a loan - and to that end I would not put myself in the position..... I'm just a soft touch you see

Edited May 28, 2008 by corkman

[coventry]

The last lawyer I used told us 1.2% per month or 15% per year is the maximum one can charge interest, government fixed rate . 3% wasn't what I was charging but what the local loan sharks were, or are, asking . A Reng Rat Nee is a debt collecting agency. They will actually stand outside a debtors house and shout out demands for loans to be paid back. Causing as much embarrasement as possible. They will follow people to work and belittle them, in front of work collegues, regarding their debt. I believe the government was trying to outlaw them but I'm not sure if they have. Who gives a toss as long as it works.

[MISTERBONK]

They will actually stand outside a debtors house and shout out demands for loans to be paid back. Causing as much embarrasement as possible. They will follow people to work and belittle them, in front of work collegues, regarding their debt. I believe the government was trying to outlaw them but I'm not sure if they have. Who gives a toss as long as it works.

Why pay someone to do it? One borrower was late by several days. I heard that he was about to depart the village for Bangkok, and I shot round to his house just in time to see him locking the door. My presence was embarrasing enough to him, with all the neighbours around, but in my best loud Thai I made it abundantly clear why I was there. I left a few minutes later with the correct payment.

This news spread throughout the village within hours, and I received many positive comments. It also had the effect of putting fear into other borrowers who may have been considering welshing on their debts. Now they knew that the normally placid farang really did have teeth!

[coventry]

They will actually stand outside a debtors house and shout out demands for loans to be paid back. Causing as much embarrasement as possible. They will follow people to work and belittle them, in front of work collegues, regarding their debt. I believe the government was trying to outlaw them but I'm not sure if they have. Who gives a toss as long as it works.

Why pay someone to do it? One borrower was late by several days. I heard that he was about to depart the village for Bangkok, and I shot round to his house just in time to see him locking the door. My presence was embarrasing enough to him, with all the neighbours around, but in my best loud Thai I made it abundantly clear why I was there. I left a few minutes later with the correct payment.

This news spread throughout the village within hours, and I received many positive comments. It also had the effect of putting fear into other borrowers who may have been considering welshing on their debts. Now they knew that the normally placid farang really did have teeth!

Thanks for the advice Misterbonk but done that . I've been seen to do that by the neighbours. My wife even went to the local police chief who called a meeting with the debtors. they all promised to pay. they all defaulted. Police chief has no power to act other than chair the meeting.

I'm not walking away from it as it's money for my daughters future. But do the debtors take that into consideration ? No. So I'm sorry to say but <deleted> the Thais when it comes to honesty.

[Dave the Dude]

Hi Coventry

I've been thru this situation too. Never again UNLESS I have the house/land deeds in my possession will I ever lend out money anymore. Even with these docs I was late-paid once and had to play games pretending to get peoples homes valued around them. Its not a situation that I will get into again, thats for sure.

If I were you, I would concentrate on working out a way to get their Land Deeds off them as security. That is the only way you will be in control of the situation.

Dave (ex Bank Manager)

[MISTERBONK]

If I were you, I would concentrate on working out a way to get their Land Deeds off them as security. That is the only way you will be in control of the situation.

Dave (ex Bank Manager)

I would have thought that was obvious. Whatever collateral is given for the loan, you must hold it personally. My safe, that I installed shortly after going into this business, is full of land certificates, with a few motorcycle registration books and a few baht of gold. No room unfortunately for the rice!

[coventry]

If I were you, I would concentrate on working out a way to get their Land Deeds off them as security. That is the only way you will be in control of the situation.

Dave (ex Bank Manager)

I would have thought that was obvious. Whatever collateral is given for the loan, you must hold it personally. My safe, that I installed shortly after going into this business, is full of land certificates, with a few motorcycle registration books and a few baht of gold. No room unfortunately for the rice!

Be carefull Misterbonk I had all my land papers, plus other peoples, in a safe in my house which was broken into and the safe removed. To get new land papers one has to go to the police and get a statement from them for each land paper that was stolen, That in itself was a nightmare. Then you have to get the person, named on the land paper, to go to the land registry office, with you, to get a new one. You having to pay their costs as they will lose a full days work. That sometimes can take a couple of days depending how busy they are. Once we got to the land office they wouldn't re-issue any of the land papers until an officer from the police station came to confirm that the theft statement was genuine. They wouldn't even accept confirmation over the phone. The officer had to do a round trip of 50+K's, guess who had to pay his cost ?

The good thing about all this is that the next day my safe was found. The safe was broken into but the contents intact. So we were able to cancel all the transactions for the previous day. My advice is use a safe deposit box at your bank.

You're probably going to say "my safe is fitted securely". I thought mine was. They poisoned my dogs, 2 cocker spanials, prior to the break in to ensure they had adequate time to remove it from the house. The safe was not moverable other than by at least 3 people, and that wouldn't have been far.

Edited May 29, 2008 by coventry

[coventry]

If I were you, I would concentrate on working out a way to get their Land Deeds off them as security. That is the only way you will be in control of the situation.

Dave (ex Bank Manager)

Dave I have the land papers but without a Khai Fark agreement you cannot do anything with the deeds. It's a useless piece of paper without the Khai Fark. This was something I found out with hind sight. I just hope my experiences helps others not to repeat my mistakes.

Edited May 29, 2008 by coventry

[Dave the Dude]

Hi Cov

Yea, nuf said

Cheers mate and good luck

Dave