Money Lending/Borrowing

[Lickey]

As us permanent stayers here all know, money lending and borrowing is a fixture of Thai life, its what they do and i dont get involved in it, when my mrs says she owes money to so & so, i shrug my shoulders and open my hands, you did the deal, you sort it!! im not going to help you, I feel that if y ou help your partner, then it will be never ending, it also gives them a sense that the ATM card does have a limit,

Mrs helped a falang recently, buying a car, she had 3 phone calls from his partner asking how much % you make? and she wanted some! Mrs was in tears about this, she just want to help people, and she has a good heart for this, she wanted the falang to be a friend for me, but his partner broke this,,

Anybody got some experineces to add?

Thanks, Lickey..

[MeMock]

Can't add any experiences I am sorry because as my wife and I share our money there is no way she would need to be borrowing money and no way would I allow her to lend money (in rural Thailand anyway).

Tell your wife to look on the bright side of her run in with the other wife, at least you know early on that the other woman is thieving scum and now at least you won't form a friendship and therefore will not get hurt later on.

[old wanderer]

My wife has accumulated a nice stack of Chanotes lending money. She give the people about 3 years to repay, and charges a part of the crop as interest.

I never pay too much attention to her business affairs.

When my mother-in-law needed a new roof, my wife asked me if I would pay...I told her when we went this summer I would. I asked her if she had any money in the bank in Thailand, or was it all loaned out...I about fell off my chair when she told me she had over 1 million baht in her bank. And she still has more rice that she has not sold yet.

We reached an agreement that I would give her the money for a roof, and she could put in her bank account here and have her mother take the money from her Thai bank account and do the roof now, before it starts to rain again. Better than me transferring money to Thailand.

We have been married for 15 years, and seem to work things out pretty well.

[Lickey]

A very apt description Memock, thieving scum!! this scum has spread the word that my mrs is no good, taking money from falang, its a sad state of affairs really but you are right, I told my mrs a few weeks ago not to help any falang and its working, some falang and a girl from the same village as the scum came here and asked about a borehole driller, mrs told them yes, i do know one but im not telling you, go and ask her in village, she know everything! she didnt want to be accused of making money from a falang anymore..<BR><BR>I dont whether to feel sorry for the falang that come here for a few months every year after sending 20/30/40.000 bht every month and see no change in the house or farm or that they are stupid and idiots to do this, that also goes for them that allow their partners to "work" away, <BR><BR> Lickey..

[glomp]

Since when is it bad to get money from farangs?

[Lickey]

Since when is it bad to get money from farangs?

If you dont know now, you will soon learn if you live or visit Thailand,

[kwonitoy]

My wife has accumulated a nice stack of Chanotes lending money. She give the people about 3 years to repay, and charges a part of the crop as interest.

I never pay too much attention to her business affairs.

When my mother-in-law needed a new roof, my wife asked me if I would pay...I told her when we went this summer I would. I asked her if she had any money in the bank in Thailand, or was it all loaned out...I about fell off my chair when she told me she had over 1 million baht in her bank. And she still has more rice that she has not sold yet.

We reached an agreement that I would give her the money for a roof, and she could put in her bank account here and have her mother take the money from her Thai bank account and do the roof now, before it starts to rain again. Better than me transferring money to Thailand.

We have been married for 15 years, and seem to work things out pretty well.

I have the same circumstance as Old Wanderer, I don't pay too much attention to the wheeling and dealing of the wife but she seems to own or has mortgages on half the village. She buys and sells cows, rice, lends money to relatives mostly and ALWAYS gets it back with interest. She doesn't deal with time as we do but somehow she keeps track of things and makes enough money to keep her happy and give some to her uncle and aunt. I learned a long time ago not to try and understand it and that works for me.

[Lickey]

My wife has accumulated a nice stack of Chanotes lending money. She give the people about 3 years to repay, and charges a part of the crop as interest.

I never pay too much attention to her business affairs.

When my mother-in-law needed a new roof, my wife asked me if I would pay...I told her when we went this summer I would. I asked her if she had any money in the bank in Thailand, or was it all loaned out...I about fell off my chair when she told me she had over 1 million baht in her bank. And she still has more rice that she has not sold yet.

We reached an agreement that I would give her the money for a roof, and she could put in her bank account here and have her mother take the money from her Thai bank account and do the roof now, before it starts to rain again. Better than me transferring money to Thailand.

We have been married for 15 years, and seem to work things out pretty well.

I have the same circumstance as Old Wanderer, I don't pay too much attention to the wheeling and dealing of the wife but she seems to own or has mortgages on half the village. She buys and sells cows, rice, lends money to relatives mostly and ALWAYS gets it back with interest. She doesn't deal with time as we do but somehow she keeps track of things and makes enough money to keep her happy and give some to her uncle and aunt. I learned a long time ago not to try and understand it and that works for me.

Exactly, let the thai better half get on with what they want to do,ive found its not apreciated when a falang trys to put his nose into their buisness, ive told my mrs, you can wheel and deal, but dont come running to me if it goes wrong, perhaps some lovelorn falangs will read these posts and understand Thailand a bit more,

[Hollywood13]

Forgive my ignorance, but what exactly is a "chanote"? The impression I have is it's a scrap of paper the lender and borrower both sign with an amount scribbled on it...basically like an IOU. Is this correct, or am I way off? Also, what is there to ensure the money is paid back? Just the person's word? What are the penalties for someone who does not pay the loan back? Are interest rates charged above or below what a bank would charge? Is this a form of loan sharking?

[rgs2001uk]

Forgive my ignorance, but what exactly is a "chanote"? The impression I have is it's a scrap of paper the lender and borrower both sign with an amount scribbled on it...basically like an IOU. Is this correct, or am I way off? Also, what is there to ensure the money is paid back? Just the person's word? What are the penalties for someone who does not pay the loan back? Are interest rates charged above or below what a bank would charge? Is this a form of loan sharking?

A chanote is the title deeds to the land, there are various title deeds, some have restrictions on them, not all title deeds will be chanot.

There is no way to ensure the money is paid back, the rates are way above what a bank will charge, and in most cases are not even legal.

Yes it is a form of loan sharking no matter how it is dressed up.

[Hollywood13]

Thank you for that explanation. So people are basically signing over the deeds to their land in exchange for a loan of -x- amount of money (with a high interest rate).

If there is no way to ensure the money is paid back, then what's the advantage of loaning out the money? Where's the incintive to repay the loan? Can the lender (holding the deed to the person's land) kick the borrower off the land? If this practice is illegal, then wouldn't that, in turn, be illegal as well?

Sorry if this is boring some of you all...just trying to understand this.

[mario299]

Thank you for that explanation. So people are basically signing over the deeds to their land in exchange for a loan of -x- amount of money (with a high interest rate).

If there is no way to ensure the money is paid back, then what's the advantage of loaning out the money? Where's the incintive to repay the loan? Can the lender (holding the deed to the person's land) kick the borrower off the land? If this practice is illegal, then wouldn't that, in turn, be illegal as well?

Sorry if this is boring some of you all...just trying to understand this.

My two cents...

Generally in the small villages money is loaned to friends and relatives at a rate of 2 or 3% per month, and larger sums of money loaned get secured by title deeds. As is true with most Thai families these title deeds are probably not in the name of the borrower, but rather the mother, father, grandparent or even further back since Thais do not usually transfer title deeds due to the cost and time involved in dealing with the District/Province offices. Too much trouble. Therefore it becomes a matter of "face". The loans are almost always promptly and properly paid (or the interest regularly paid) because the village will know who the deadbeats are and who is a good risk. Interest is sometimes paid in rice or some other method other than money, whatever is agreed. My wife does this on occasion, and has not had any problem. It is good for the small farmer/villager to be able to get needed money quickly, without dealing with a bank, and 2% per month is about what banks charge for the approximate amounts loaned. She is not trying to "loan-shark", but rather looks at it as helping friends and relatives. Hope this helps to understand Thai thinking.

mario299.:jap:

[Hollywood13]

Thank you Mario, that certainly clears up my confusion in regards to the matter. My curiousity doesn't stem from me wanting to get involved in something like that, but was rather wanting to know what it involves incase my significant other decides to do something like that (if so, was wondering if I should be worried).

[transam]

In Isaan life it is endemic, they know know different. My wife's sister (55) who has never worked a day in her life, spends every day working out who to borrow money from, spends her day drinking Heineken while hubby, a low paid government official has himself to borrow from his pension to fix her fixation with borrowing, buying beer, playing cards and buying the winning lotto ticket, crazy, but endemic.

PS. Must add, back street lending is a risky business in itself, as a borrower can pay little money to blow the brains out of a lender to close the debt.

Edited January 22, 2011 by transam

[pipo1000]

My wife has accumulated a nice stack of Chanotes lending money. She give the people about 3 years to repay, and charges a part of the crop as interest.

I never pay too much attention to her business affairs.

When my mother-in-law needed a new roof, my wife asked me if I would pay...I told her when we went this summer I would. I asked her if she had any money in the bank in Thailand, or was it all loaned out...I about fell off my chair when she told me she had over 1 million baht in her bank. And she still has more rice that she has not sold yet.

We reached an agreement that I would give her the money for a roof, and she could put in her bank account here and have her mother take the money from her Thai bank account and do the roof now, before it starts to rain again. Better than me transferring money to Thailand.

We have been married for 15 years, and seem to work things out pretty well.

So your wife has 1 million in the bank still you have to pay for her mothers roof.........sure things are working out very well..................especially for your wife

[mario299]

In Isaan life it is endemic, they know know different. My wife's sister (55) who has never worked a day in her life, spends every day working out who to borrow money from, spends her day drinking Heineken while hubby, a low paid government official has himself to borrow from his pension to fix her fixation with borrowing, buying beer, playing cards and buying the winning lotto ticket, crazy, but endemic.

PS. Must add, back street lending is a risky business in itself, as a borrower can pay little money to blow the brains out of a lender to close the debt.

Transam

I usually agree with your posts, but this seems quite extreme to me. My wife's aunt sounds very much like your wife's sister...not a pot to pee in, drunk all the time...but that would make her the deadbeat known to the village as a poor risk for lending. As to blowing someone away over a 20,000 baht debt? Never heard of it happening around here.

The Thais we know need to be able to borrow to grow the rice they must have to live. They are hard-working down to earth people, and thus seem to us to be very likely to honor their obligations. Again, it's a "face thing".

mario299

[transam]

In Isaan life it is endemic, they know know different. My wife's sister (55) who has never worked a day in her life, spends every day working out who to borrow money from, spends her day drinking Heineken while hubby, a low paid government official has himself to borrow from his pension to fix her fixation with borrowing, buying beer, playing cards and buying the winning lotto ticket, crazy, but endemic.

PS. Must add, back street lending is a risky business in itself, as a borrower can pay little money to blow the brains out of a lender to close the debt.

Transam

I usually agree with your posts, but this seems quite extreme to me. My wife's aunt sounds very much like your wife's sister...not a pot to pee in, drunk all the time...but that would make her the deadbeat known to the village as a poor risk for lending. As to blowing someone away over a 20,000 baht debt? Never heard of it happening around here.

The Thais we know need to be able to borrow to grow the rice they must have to live. They are hard-working down to earth people, and thus seem to us to be very likely to honor their obligations. Again, it's a "face thing".

mario299

My wife's wayward daughter borrowed money from lowlife money lenders and they took the bike l bought her as security. I went ballistic and went to find these guys, just to get the bike back. Mrs went and talked and said they have a gun. She was told the bike wasn't there, to come back in two days, which we did. Got the bike and sold it, no more problem.

My point is there are all sorts of money lenders out there, the ones a villager might of known for years and the other who charge horrendous interest and back it up with intimidation, and visa versa, lowlife borrowing cash and not paying it back.

[rgs2001uk]

Thank you for that explanation. So people are basically signing over the deeds to their land in exchange for a loan of -x- amount of money (with a high interest rate).

If there is no way to ensure the money is paid back, then what's the advantage of loaning out the money? Where's the incintive to repay the loan? Can the lender (holding the deed to the person's land) kick the borrower off the land? If this practice is illegal, then wouldn't that, in turn, be illegal as well?

Sorry if this is boring some of you all...just trying to understand this.

My two cents...

Generally in the small villages money is loaned to friends and relatives at a rate of 2 or 3% per month, and larger sums of money loaned get secured by title deeds. As is true with most Thai families these title deeds are probably not in the name of the borrower, but rather the mother, father, grandparent or even further back since Thais do not usually transfer title deeds due to the cost and time involved in dealing with the District/Province offices. Too much trouble. Therefore it becomes a matter of "face". The loans are almost always promptly and properly paid (or the interest regularly paid) because the village will know who the deadbeats are and who is a good risk. Interest is sometimes paid in rice or some other method other than money, whatever is agreed. My wife does this on occasion, and has not had any problem. It is good for the small farmer/villager to be able to get needed money quickly, without dealing with a bank, and 2% per month is about what banks charge for the approximate amounts loaned. She is not trying to "loan-shark", but rather looks at it as helping friends and relatives. Hope this helps to understand Thai thinking.

mario299.:jap:

Here is another insight into Thai thinking.

Thais usually dont transfer the land deeds because they are unable to do so at the local land office, because of the type of deeds held.

For Shivers, the advantage to loaning out the money is the rates of interest being charged, 10% per month is normal, 20% isnt unheard of and one of the worst cases I heard of was a whopping 50% per month, borrow 2,000 baht and pay back 100 baht per day for a month, there is only so much fried squid you can sell in a day.

We are talking here about people who are unable to covert a fraction to a decimal to a per cent.

These serious money lenders arent stupid, they are business people, there are certain land deeds they wont touch, in some cases the land will be transferred over to them at the local land office, so legally the land now belongs to them, until such time as the loan is paid back.

They sure as hell aint loaning you the true value of your propertry, so it suits them if you dont pay the money back.

Cars on finance is something else to consider, can tell you about a guy who wanted to borrow 500,000 baht on a car, the car was worth 700,000 at most, what he forgot to mention was the care still had about 400,000 owing on it, so whoever took that on would have been out of pocket.

The lender was smarter than the person wanting the loan, go to finance company pay the outstanding loan and transfer car to lenders name and give the person wanting the loan 100,000 baht.

These people will try it on with anyone they think they can get away with ripping off.

At the end of the day its usaully face that drives these people to money lenders, got to keep up with the somchais at all costs, better to lose money than lose face.

Makes me wonder what ever happened to the extended Thai family we keep hearing about?

[mario299]

Thank you for that explanation. So people are basically signing over the deeds to their land in exchange for a loan of -x- amount of money (with a high interest rate).

I

Sorry if this is boring some of you all...just trying to understand this.

My two cents...

Generally in the small villages money is loaned to friends and relatives at a rate of 2 or 3% per month, and larger sums of money loaned get secured by title deeds. As is true with most Thai families these title deeds are probably not in the name of the borrower, but rather the mother, father, grandparent or even further back since Thais do not usually transfer title deeds due to the cost and time involved in dealing with the District/Province offices. Too much trouble. Therefore it becomes a matter of "face". The loans are almost always promptly and properly paid (or the interest regularly paid) because the village will know who the deadbeats are and who is a good risk. Interest is sometimes paid in rice or some other method other than money, whatever is agreed. My wife does this on occasion, and has not had any problem. It is good for the small farmer/villager to be able to get needed money quickly, without dealing with a bank, and 2% per month is about what banks charge for the approximate amounts loaned. She is not trying to "loan-shark", but rather looks at it as helping friends and relatives. Hope this helps to understand Thai thinking.

mario299.:jap:

Here is another insight into Thai thinking.

Thais usually dont transfer the land deeds because they are unable to do so at the local land office, because of the type of deeds held.

10% per month is normal, 20% isnt unheard of and one of the worst cases I heard of was a whopping 50% per month, there is only so much fried squid you can sell in a day.

Transam and Rgs2001UK

I understand both of your points, am only relating what happens around these parts, and I am very glad that we don't live in "your villages". I rather suspect your examples stem from the big city environment rather than the Issan rice-farmers locale, but your points are well-taken...there are bad, greedy. under-handed people everywhere in the world. We try to stay clear, and try to stick with the "salt-of the earth" type of folks.

mario299

[Lickey]

Dont know if my mrs was doing the lending thing before i arriived on the scene?I dont want to ask her because its none of my buisness, im pretty sure she knows how i feel about this,

But again, its up to her, bad debtors, she will get to work on the farm or be a housemaid till the debt is paid off,

You posters with a money lending mrs, did she do this before you came along, or was it that she has a falang B/F husband who would bail her out??

[Rooo]

I have previously closed 2 threads discussing money lending. This is an illegal activity & as such is not allowed to be discussed on Thaivisa forum.

16) Not to post about gambling, betting, pornography, illegal drugs, fake goods/clothing etc and other activities that are officially illegal in Thailand.