For the past couple of years at this time of year my better half loans money to people and gets paid back after the rice harvest, now a number of people do this around the village, she only charges 30% and undercuts others at 35% or higher, its quite a lucrative business, in the UK its generally known as loan sharks.

Last year we loaned 200k and took back in 265K in a 7 month period( one family could not meet the deadline so are paying 45% in Dec10.)

We could easily double up the loans but 1) I don't like the element of risk 2)I'd prefer to loan at a much lower rate if we were to carry on, these poor farmers get a rough enough deal as it is 3)Other loan sharks may see us as being unreasonable competition but as our extended family is quite pre-dominant in the area with a police oficer brother in law I can't see its worth anyones while trying to stop us.

Anyone else come across this?

JP

What you are doing may not be illegal in Thailand but it certainly is unethical. Eventually, one of your "clients" is bound to cause you more trouble than you ever bargained for.

Wow! Those are some pretty usurious rates, even for Thailand. You may be interested to know Finance Minister Korn has opened up a debtors hotline for complaints about debts "outside the legal financial system". There's an article about it in todays online Bangkok Post in the Business section. You know keeping out the legal financial netwrk is one of the prime drivers of the red shirt movement don't you? Those provincial money lenders don't want to share their good thing with anyone.

Memory says that back in my Married in Issan Days, rates where 3% for a known good risk and a starting rate of 5 % for an unknown risk.

That's per month.

My Misses wanted to do this Loan Sharking and was annoyed that I would not finance.

Still she sorted matters out and 'Bought' the Concession for the Lottery.

I am too embarrassed to say the Debt she got Lumbered/Stitched up with, needless to say Ex wife.

john

But Darling every body know me Good Lady.

Onest.

What you are doing may not be illegal in Thailand but it certainly is unethical. Eventually, one of your "clients" is bound to cause you more trouble than you ever bargained for.

I agree that those thoughts have repeatedly crossed my mind, I have no direct involvement in any of it,its the mother in law, wife and her brothers managing this little enterprise, importantly the loans are limited to 20K per person, not the end of the world if not paid back, and the one outstanding debtor is now offering land instead. It is very socially unacceptable to default on a loan as their reputation is lost and other lenders soon hear about it.

I guess I rationalise it by saying our interest rates are lower than anyone else.

JP

I think soon you will be staring down the wrong end of a 45 or the like......chok dee

Unless the OP has a proper Money Lending licence, this is an illegal activity & as such not allowed to be discussed.