Governments Anti-loan Shark Scheme

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ANTI-LOAN-SHARK SCHEME

Surprise as few register

By THE NATION

Published on December 2, 2009

Most victims of loan sharks appear to be reluctant to register for the government's refinancing scheme.

Officials say it is unclear whether they believe they can wait before crying for help or are simply too afraid of their creditors to come forward.

Many loan sharks reportedly use violent means to collect repayments. The Justice Ministry's People's Debt Problem Centre has received more than 100 complaints about the intimidating methods of loan sharks. Yet some of the "robust" debt collectors are these days government officials under cover.

The Office of the Public Sector Anti-Corruption Commission is now investigating the alleged use of threats against debtors.

On the first day of registration for the government's refinancing scheme yesterday, very few people showed up. People who want the government to help negotiate debt repayments with unregistered moneylenders must register themselves under the scheme by December 30.

In Chiang Mai, the Government Savings Bank's Area 1 branch arranged extra chairs in its public area in anticipation of a large number of people arriving to join the government's refinancing scheme. When the branch began registration at 8am, only five people had arrived, and of those only one proceeded to register. The others made inquiries and left.

There was also a lukewarm response at Chiang Mai branches of the Bank for Agriculture and Agricultural Cooperatives. After opening 27 registration places in the city, very few people turned up.

"We have prepared Bt100 million to refinance the debts of people registering with us in Chiang Mai," a bank official, Sakchai Khamruangrit, said. "Perhaps more people will come forward later this month."

There was a similar reluctance to rush to register for the government's scheme in Songkhla and Nan, but there was an "enthusiastic" response in Surat Thani and Khon Kaen.

Across the country, only 17,000 people registered yesterday as victims of loan sharks and sought the help of the government's refinancing scheme. Yet it is estimated that millions of Thais have obtained loans from "informal", out-of-the-system lenders.

Despite the government's intervention, one unregistered moneylender yesterday expressed confidence the out-of-the-system money-lending business would continue to thrive.

"When people suddenly run short of money, they need quick cash, and registered financial institutes cannot give them that," she said.

-- The Nation 2009/12/2

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[hammered]

Loan sharks are often scary people and usually have powerful officials like police assisting them. They also kill people, cut people and threaten families. Now you may want to wander into a bank and register for this if it is one on the nicer end of things and who doesnt mind, but most certainly arent going to upset some hoodlum who lives close by and knows them and their family.

Another question is what loan related paperwork is required and does it even exist in many cases?

Another point is that the scheme hasnt been at all well publicised in terms of what you need to do to rescedule your "loan". It is a good idea but the government do need to get better prepared in divesting information in a timely, understandable and clear manner. That is one thing they never learned form Thaksin who was good at that stuff.

[ozsamurai]

negotiate debt repayments with unregistered moneylenders now there's the problem right there. The govt is going to send a letter to the thug for Mr Somchai saying he cant pay anymore, thug who already has police immunity gets Mr Somchai's legs broken. This will only clean up the small fish lenders, with no protection, and as usual leave a larger slice of the corruption pie to the bigger players... tit! They won't bash you up, they will take a family home and put your family in debt for generations to come, legally! Ask the Japanese, its been going on there for centuries. Organized (Government) Crime.

Oz

[gregb]

My question is, how do I apply as a thuggish money lender? I have at least 300K of "loans" out to various family members who are supposed to pay me back, but of course never have any money when we go to visit them.

I would love to make this the government's problem instead.

How do I go about this?

[surangw]

for small loans ( under 2000 bht) just where are ordinary persons supposed to go?

hard to have a plan with no plan further that cracking down

[brahmburgers]

It's a problem that even the smartest designed gov't sponsored program could barely scratch the surface of. It's like starting a government program for drunks who consumed too much grog at the karaoke the night before.

Then there's the festering problem of short-term, extremely high % payment loans given to the poorest people like sidewalk vendors. Example, the sidewalk space might be 100 baht, so along comes a slick talking person.

It's probably an Indian/Thai and the cops either look the other way or take a cut. That person offers to loan the 100 baht, but the vendor has to pay back 200 baht the next day. If the vendor can't come up with 100 baht on day one, it's doubtful he/she will have 200 baht to pay the following day, or 300 baht the 2nd day, or 400 baht the 3rd day, ....and so on.

Meanwhile, the vendor may want to keep renting the space for days on end, but is always behind on payments, so the accrued interest keeps building up exponentially. It could happen that the vendor's only possession of value is taken, such as a motorbike, a watch, mobile phone, or even the vendor's cart, when things continue to go downhill.

Edited December 2, 2009 by brahmburgers

[gregb]

OK,

But nobody is answering my questions.

I'm a thuggish money lender. I've made over 300k in loans to family members, and none of them have any hope of paying me back. I might as well be charging 200% daily interest for all the revenue it is generating.

How do I get the government to accept my bad debt? Isn't that the real point of this whole scam? It certainly isn't to help the poor, so it must be designed to help me.

If I jump up and down in the middle of the bank and scream "I'm an illegal money lender, and I want to cooperate" will the government then pay me the money I gave to my deadbeat relatives?

This sounds like it might be my chance for a bailout. How do I get on board?

Edited December 3, 2009 by gregb

[prakhonchai nick]

OK,

But nobody is answering my questions.

I'm a thuggish money lender. I've made over 300k in loans to family members, and none of them have any hope of paying me back. I might as well be charging 200% daily interest for all the revenue it is generating.

How do I get the government to accept my bad debt? Isn't that the real point of this whole scam? It certainly isn't to help the poor, so it must be designed to help me.

If I jump up and down in the middle of the bank and scream "I'm an illegal money lender, and I want to cooperate" will the government then pay me the money I gave to my deadbeat relatives?

This sounds like it might be my chance for a bailout. How do I get on board?

Gregb = you are by your own admittance an illegal money lender -and a farang one at that!. No work permit. I would stop jumping up and down if I were you and keep a very low profile. The only boarding you are likely to do is to board an airplane when you are deported!

[gregb]

Gregb = you are by your own admittance an illegal money lender -and a farang one at that!. No work permit. I would stop jumping up and down if I were you and keep a very low profile. The only boarding you are likely to do is to board an airplane when you are deported!

You're right. Helpful suggestion.

My wife is a thuggish money lender! How does she get the government to pay for these debts?

I can see all 33 kg's of her beating up her deadbeat relatives.

[Steve2UK]

Police asked to give hand in informal debt-refinancing program

BANGKOK, 8 December 2009 (NNT) – Deputy Secretary-General to the Prime Minister, Police General Thanee Somboonsup, urges the police to help promote the informal debt refinancing scheme.

Police General Thanee, said on Tuesday, that the police should cooperate with the government in encouraging people suffering from high-interest unconventional loans to register for the scheme during the registration period throughout December 2009. He assigned the police to collect information of both informal debtors and lenders.

In addition, the deputy secretary-general said the police needed to assure informal creditors who did not threaten the debtors that they would not be taxed retroactively. As for the creditors with rogue behavior, Police General Thanee said the police would take action against them immediately.

Police General Thanee also stressed that any government officials involved in illegal debt lending would receive serious disciplinary and criminal punishments.

News ID: 255212080034

Reporter : Sarun Saelee

-- NNT 8 December 2009

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