Loan Sharks And Thai Household Debt

[simple1]

Occasionally you will read about loan sharks using enforcement techniques and the borrower reports them to the police as they are desperate. The loan sharks are arrested, but what then happens to the borrower with no protection? Cannot get a loan from the bank as no payslips, no tax payment etc

Here in Pattaya with no collateral loan shark interest rate is a minimum of 10% pcm. However in some circumstances more.

A member of my family was stopped and tested positive for drugs. Was his second offense & total fines, police pay offs so that police did not recommend prison time, lawyer etc was 50,000 baht. Married with two young children. His wife went to a loan shark and was quoted 15,000 a month interest alone, equal to his monthly income. Not enough money go to jail for 18 months. So I lent them the 50k at no interest so he could support his wife & family & not go to jail. If he goes back on drugs and gets caught again I've made it clear no more money, go to prison. Another instance was my wife's elderly brother who needed specialist medical care at 25k baht. They had been paying interest only for a few years with no reduction in the capital amount, again helped them out as very poor. TV members can say I am a fool and so on, but this is my morality & fully aware the loans may not be paid off, but so far on track.

I know of other circumstances such as where a father was killed in an accident and the loan shark insisted his daughter pay off the debt or suffer the consequences. Day to day reality of life in Thailand for some people without access to bank loans.

[pattayadingo]

When I lived out in the village scene the norm was nearer 5% per month. In some cases 10% per month. There were also rates for short term loans that were even more.

No matter what you advise or do to help many Thai people, those who cannot handle or control finances will never be any different and they will get back to the money lenders again sooner or later.

[nong38]

They WENT to the loan shark.....

Don't spend more money than you earn and you are safe.

Right, but this needs some "thinking ahead" skills. Not all that common around here.

Spot on.

[nong38]

I would no think the loaners should be classed as vermin or scum, that is not right. They offer a service, its up to you if take up the offer, there is no loaded gun, the clients must know the score when the deal is struck or am I missing a trick here? Desperate people do desperate things and dont think about the consequences of collection day until just days before. Once you are in the trap its very difficult to get out without a marriage or death looming when the income might solve the problem, if they remember about the debt.

[nong38]

Occasionally you will read about loan sharks using enforcement techniques and the borrower reports them to the police as they are desperate. The loan sharks are arrested, but what then happens to the borrower with no protection? Cannot get a loan from the bank as no payslips, no tax payment etc

Here in Pattaya with no collateral loan shark interest rate is a minimum of 10% pcm. However in some circumstances more.

A member of my family was stopped and tested positive for drugs. Was his second offense & total fines, police pay offs so that police did not recommend prison time, lawyer etc was 50,000 baht. Married with two young children. His wife went to a loan shark and was quoted 15,000 a month interest alone, equal to his monthly income. Not enough money go to jail for 18 months. So I lent them the 50k at no interest so he could support his wife & family & not go to jail. If he goes back on drugs and gets caught again I've made it clear no more money, go to prison. Another instance was my wife's elderly brother who needed specialist medical care at 25k baht. They had been paying interest only for a few years with no reduction in the capital amount, again helped them out as very poor. TV members can say I am a fool and so on, but this is my morality & fully aware the loans may not be paid off, but so far on track.

I know of other circumstances such as where a father was killed in an accident and the loan shark insisted his daughter pay off the debt or suffer the consequences. Day to day reality of life in Thailand for some people without access to bank loans.

You sound like a good man, I hope you get your money back in time, not being sarcastic either, not many like you about, dont do it to often or you may get burnt.

[simple1]

Occasionally you will read about loan sharks using enforcement techniques and the borrower reports them to the police as they are desperate. The loan sharks are arrested, but what then happens to the borrower with no protection? Cannot get a loan from the bank as no payslips, no tax payment etc

Here in Pattaya with no collateral loan shark interest rate is a minimum of 10% pcm. However in some circumstances more.

A member of my family was stopped and tested positive for drugs. Was his second offense & total fines, police pay offs so that police did not recommend prison time, lawyer etc was 50,000 baht. Married with two young children. His wife went to a loan shark and was quoted 15,000 a month interest alone, equal to his monthly income. Not enough money go to jail for 18 months. So I lent them the 50k at no interest so he could support his wife & family & not go to jail. If he goes back on drugs and gets caught again I've made it clear no more money, go to prison. Another instance was my wife's elderly brother who needed specialist medical care at 25k baht. They had been paying interest only for a few years with no reduction in the capital amount, again helped them out as very poor. TV members can say I am a fool and so on, but this is my morality & fully aware the loans may not be paid off, but so far on track.

I know of other circumstances such as where a father was killed in an accident and the loan shark insisted his daughter pay off the debt or suffer the consequences. Day to day reality of life in Thailand for some people without access to bank loans.

You sound like a good man, I hope you get your money back in time, not being sarcastic either, not many like you about, dont do it to often or you may get burnt.

thanks - my wife basically said the same, no more help for the family until the existing debts are paid off

[loong]

he earns less than 10,000B a month. With repayments at over 200 B a DAY and rising if he cannot pay, what chance does he and his young family have of ever getting out of the clutches of these low life scum.

Anybody that has an income of little over 300 Bt per day and takes out a loan with repayments of 200 Baht per day is a moron. He willingly put himself in the clutches of these low life scum. It is his fault. He knew the terms but was too stupid to do the simple arithmetic that if he earns 300 Bt per day and has to pay 200Bt per day to service the loan, he will have 100 Bt per day to take care of his family.

[chiangmaikelly]

he earns less than 10,000B a month. With repayments at over 200 B a DAY and rising if he cannot pay, what chance does he and his young family have of ever getting out of the clutches of these low life scum.

Anybody that has an income of little over 300 Bt per day and takes out a loan with repayments of 200 Baht per day is a moron. He willingly put himself in the clutches of these low life scum. It is his fault. He knew the terms but was too stupid to do the simple arithmetic that if he earns 300 Bt per day and has to pay 200Bt per day to service the loan, he will have 100 Bt per day to take care of his family.

In the context of this thread who are the morons?

[BigJohnnyBKK]

Anybody that has an income of little over 300 Bt per day and takes out a loan with repayments of 200 Baht per day is a moron.

This is exactly the argument for the enforcement of anti-usury laws.

Unless you're arguing for the Darwin effect, the deadly vipers helping Thailand improving the population's intelligence by wiping out the particularly idiotic.

Edited November 1, 2012 by BigJohnnyBKK

[somchaismith]

If you can't pay the loan back - you can't pay it back. Illegal sharks are wrong for loaning the cash in the first place, that's the risk they take. If they threaten you, go to the coppers. If the cops can't or won't help you and the sharks get physical, be prepared to defend yourself against them.

[chiangmaikelly]

If you can't pay the loan back - you can't pay it back. Illegal sharks are wrong for loaning the cash in the first place, that's the risk they take. If they threaten you, go to the coppers. If the cops can't or won't help you and the sharks get physical, be prepared to defend yourself against them.

What do you do when the loan shark is the copper? No, did I say that? I am not going to get another good deal on a motorcycle that was confiscated.

[rgs2001uk]

Interesting replies so far ... so many assumptions.... so many fatuous replies. I am not too sure as to the amount borrowed but we are talking about a young family ... I have met them, nice young chap, works himself into the ground, wife and small son. He usually gets around 7000 B a month maybe a bit more if he can get some OT. He doesn't drink (maybe the occasional Leo), does not gamble, doesn't womanise. I've seen their 'flat'. One crappy room in the middle of nowhere for 3000 B a month + power etc., etc. They live in BKK .. that is where he can get some work. So don't go lecturing me about him trying to maintain face and have the latest TV etc. Your replies indicate the depth of your understanding. My point is..these practices are clearly exploitative and in the west there are often ways to circumvent loan sharks. My questions were to do with any experiences Tv members may have had and any constructive advice to see how they can get out of their spiraling debt.

I suggest if you have nothing constructive to offer then keep your opinions to yourself.

Ok heres something constructive, you say he lives in Bkk.

Go and live in some crappy 1,000 baht per month room, tell him to get a job as a Ror Por Por, they are advertising round my way for 500 baht per day jobs.

He can work at the above until such times as his loans are paid off.

[rgs2001uk]

Interesting replies so far ... so many assumptions.... so many fatuous replies. I am not too sure as to the amount borrowed but we are talking about a young family ... I have met them, nice young chap, works himself into the ground, wife and small son. He usually gets around 7000 B a month maybe a bit more if he can get some OT. He doesn't drink (maybe the occasional Leo), does not gamble, doesn't womanise. I've seen their 'flat'. One crappy room in the middle of nowhere for 3000 B a month + power etc., etc. They live in BKK .. that is where he can get some work. So don't go lecturing me about him trying to maintain face and have the latest TV etc. Your replies indicate the depth of your understanding. My point is..these practices are clearly exploitative and in the west there are often ways to circumvent loan sharks. My questions were to do with any experiences Tv members may have had and any constructive advice to see how they can get out of their spiraling debt.

I suggest if you have nothing constructive to offer then keep your opinions to yourself.

"Interesting replies so far ... so many assumptions.... so many fatuous replies."

"So don't go lecturing me about him trying to maintain face and have the latest TV etc"

"Your replies indicate the depth of your understanding."

"I suggest if you have nothing constructive to offer then keep your opinions to yourself."

Interesting comments by the OP, somewhat perplexing coming from a man who wrote the following, not so long back,

"A couple of observations; One thing probably is clear and that is the degree to which Thais burden themselves with personal debt, whether it be in BKK for the latest iphone or out in the sticks for a new pickup etc"

"They do seem to like borrowing from all and sundry."

The above is taken from this thread,

[somchaismith]

A crappy room in the middle of nowhere should cost a lot less than 3000 baht.

[NeverSure]

These loan sharks can be nice old rich ladies. It not that simple. The problem is that the Thai state do not protect their people against this practice.

No offense and not personally intended, but no where I've lived have I wanted a nanny state to run my life for me. To me freedom is more important than too much government, even if I myself stumble.

The more laws there are beyond the simple don't steal, don't murder, etc., the more I feel bound. In fact I hate government intrusion into my life, but that's just me.

Cheers.

[BigJohnnyBKK]

A crappy room in the middle of nowhere should cost a lot less than 3000 baht.

The difference between what you can get for 3K and what you get for 2K is really huge. In my area of Bangkok the 2K closet is about 4' wide and maybe 7' long, you have to roll up the bedding to open the door. Just saying. . .

[NeverSure]

Anybody that has an income of little over 300 Bt per day and takes out a loan with repayments of 200 Baht per day is a moron.

This is exactly the argument for the enforcement of anti-usury laws.

Unless you're arguing for the Darwin effect, the deadly vipers helping Thailand improving the population's intelligence by wiping out the particularly idiotic.

No offense mate, but we already have laws against all kinds of things and they are selectively enforced and selectively obeyed. Prostitution is illegal, no? Drugs are illegal, but some choose to use them.

IMHO it's about culture and personal responsibility.

Just sayin'.

[BigJohnnyBKK]

No offense mate, but we already have laws against all kinds of things and they are selectively enforced and selectively obeyed.

Yes, exactly my point.

And I wasn't advocating for such laws myself, just observing that the "morons" aspect is a point in favor of that argument, not against it.

[farang000999]

Always funny how those who have received so much benefit from the welfare state rally so furiously against it.

[rattler]

Mc Magus the advice is simple " dont borrow more than you earn", does your friend have a phone/car/bike smoke/ drink.

More advice " save whenever you can" rainy days always come.

[rattler]

I don't think you'll find its confined to Thailand. In UK there's Wonga which I think has similar rates if you sit down and work them out.

As long as you have inflation and salaries/profits in many sectors not keeping up with it, then there's going to be a demand.

Except in the Uk u can declare yourself bankrupt and owe nothing all written off after 12 months. Just make sure you own no assets........unlike Thailand where youll lose both legs or life etc.

Too many people in the Uk do this now.

Take some responsibiltiy for your actions...............tell the friend

[McMagus]

Interesting replies so far ... so many assumptions.... so many fatuous replies. I am not too sure as to the amount borrowed but we are talking about a young family ... I have met them, nice young chap, works himself into the ground, wife and small son. He usually gets around 7000 B a month maybe a bit more if he can get some OT. He doesn't drink (maybe the occasional Leo), does not gamble, doesn't womanise. I've seen their 'flat'. One crappy room in the middle of nowhere for 3000 B a month + power etc., etc. They live in BKK .. that is where he can get some work. So don't go lecturing me about him trying to maintain face and have the latest TV etc. Your replies indicate the depth of your understanding. My point is..these practices are clearly exploitative and in the west there are often ways to circumvent loan sharks. My questions were to do with any experiences Tv members may have had and any constructive advice to see how they can get out of their spiraling debt.

I suggest if you have nothing constructive to offer then keep your opinions to yourself.

"Interesting replies so far ... so many assumptions.... so many fatuous replies."

"So don't go lecturing me about him trying to maintain face and have the latest TV etc"

"Your replies indicate the depth of your understanding."

"I suggest if you have nothing constructive to offer then keep your opinions to yourself."

Interesting comments by the OP, somewhat perplexing coming from a man who wrote the following, not so long back,

"A couple of observations; One thing probably is clear and that is the degree to which Thais burden themselves with personal debt, whether it be in BKK for the latest iphone or out in the sticks for a new pickup etc"

"They do seem to like borrowing from all and sundry."

The above is taken from this thread,

http://www.thaivisa....le/page__st__25

My memory does still function and I can still remember what I say.... There is no arguing about Thai household debt.... if you read the post with even a modicome comprehension you would have seen that the thrust of the post was to find out about members' experiences. A couple of other observations ... I think forum rules require you to use the QUOTE button not selective quotations... also, in what way has you post contributed to the discussion thread?

[n0mad]

Had a friend whose father was a loan shark, actually rode int he car one afternoon while she collected from clients.

certainly wouldn't call him scum he was a very nice and kind man offering my a bed in his home and food from his table.

whether or not his job is ethical well i don't know the circumstances of his customers or his business to comment.

in the regards to the situation you described did they have access to cheaper debt? what were there alternatives? to be frank if i had to choose between a childs education and poor terms of debt, providing a can service the debt i would choose the debt any day.

in Australia, unsecured loans are around 14%, credit cards charge around 20% and these are for people who are accepted by banks for debt. if you have to go to a non-bank lender you can get screwed much much harder.

the Thai's who borrow from loan sharks should be looking at banks first if they can get approved, if they cannot get approved what solution do you suggest outside of a loan shark?

[CPH]

Had a friend whose father was a loan shark, actually rode int he car one afternoon while she collected from clients.

certainly wouldn't call him scum he was a very nice and kind man offering my a bed in his home and food from his table.

whether or not his job is ethical well i don't know the circumstances of his customers or his business to comment.

in the regards to the situation you described did they have access to cheaper debt? what were there alternatives? to be frank if i had to choose between a childs education and poor terms of debt, providing a can service the debt i would choose the debt any day.

in Australia, unsecured loans are around 14%, credit cards charge around 20% and these are for people who are accepted by banks for debt. if you have to go to a non-bank lender you can get screwed much much harder.

the Thai's who borrow from loan sharks should be looking at banks first if they can get approved, if they cannot get approved what solution do you suggest outside of a loan shark?

Maybe he is not so kind and friendly if people can not pay. The problem in all this is that loans in the grey and black market should not be available at all. People should be protected from loan sharks by the law and that law should be enforced. Then people would not be able to take up loans they cannot afford, because if they could afford the loan they would most propably be able to get a loan in a bank. It is as simple as that. Why do we as westerners suddenly defend loan sharks. We are all protected by the law in our old countries.

[n0mad]

Had a friend whose father was a loan shark, actually rode int he car one afternoon while she collected from clients.

certainly wouldn't call him scum he was a very nice and kind man offering my a bed in his home and food from his table.

whether or not his job is ethical well i don't know the circumstances of his customers or his business to comment.

in the regards to the situation you described did they have access to cheaper debt? what were there alternatives? to be frank if i had to choose between a childs education and poor terms of debt, providing a can service the debt i would choose the debt any day.

in Australia, unsecured loans are around 14%, credit cards charge around 20% and these are for people who are accepted by banks for debt. if you have to go to a non-bank lender you can get screwed much much harder.

the Thai's who borrow from loan sharks should be looking at banks first if they can get approved, if they cannot get approved what solution do you suggest outside of a loan shark?

Maybe he is not so kind and friendly if people can not pay. The problem in all this is that loans in the grey and black market should not be available at all. People should be protected from loan sharks by the law and that law should be enforced. Then people would not be able to take up loans they cannot afford, because if they could afford the loan they would most propably be able to get a loan in a bank. It is as simple as that. Why do we as westerners suddenly defend loan sharks. We are all protected by the law in our old countries.

i believe his loans were secured. so he could just sell whatever it was he was holding of theirs but i can say he wouldn't have done anything he was a relatively small guy. I don't disagree with stamping out loan sharks, in Australia loan sharks are gone but there are still just as many unscrupulous lenders out there with similar terms to loan sharks.

Actually, many people in western countries who can afford debt are refused by the banks usually because of a lack of credit history, a poor credit history or lack of documents to support the loan.

Assuming the person in the OP could have been approved for a bank loan then it comes down to educating these people on their options. If he couldn't get a bank loan then i think the alternative of denying a child an education is by far the worse choice.

It would be very interesting to know what would happen to Thai GDP if loan sharks were prevented from further lending, i'd imagine there would be quite a negative impact as well.

by the way, i don't defend any person who requires someone to enter into a loan which cannot be serviced and then screws that person over either physically or financially (this covers loan sharks and unscrupulous lenders). I do condone a business or someone who enters into an agreement to lend money to someone who needs it for their own business or personal reasons when the terms are fair and the debt can easily be serviced, this i feel can be a much needed service and can benefit all involved.

[chiangmaikelly]

Had a friend whose father was a loan shark, actually rode int he car one afternoon while she collected from clients.

certainly wouldn't call him scum he was a very nice and kind man offering my a bed in his home and food from his table.

whether or not his job is ethical well i don't know the circumstances of his customers or his business to comment.

in the regards to the situation you described did they have access to cheaper debt? what were there alternatives? to be frank if i had to choose between a childs education and poor terms of debt, providing a can service the debt i would choose the debt any day.

in Australia, unsecured loans are around 14%, credit cards charge around 20% and these are for people who are accepted by banks for debt. if you have to go to a non-bank lender you can get screwed much much harder.

the Thai's who borrow from loan sharks should be looking at banks first if they can get approved, if they cannot get approved what solution do you suggest outside of a loan shark?

Maybe he is not so kind and friendly if people can not pay. The problem in all this is that loans in the grey and black market should not be available at all. People should be protected from loan sharks by the law and that law should be enforced. Then people would not be able to take up loans they cannot afford, because if they could afford the loan they would most propably be able to get a loan in a bank. It is as simple as that. Why do we as westerners suddenly defend loan sharks. We are all protected by the law in our old countries.

50% of the Thai economy is black or gray market economy. The Thais like black and gray market economy as they like black and gray market loans that go along with the black and gray market economy. That you want to protect them like your nanny wanted to protect you if of little concern to Thai people. If you or the Thai people want to be protected like in your old country don't let the door hit you, ya? I mean no one is stopping you from going there to be protected. However this is Thailand and your old country rules have little relevance here. Thais eat rice. French eat bread. Thais take a lot of showers French don't.

[Heng]

Yeah, these people need some protection against a lack of common sense that many people develop before they are even teenagers. Of course, those are the people who typically grow up and end up loaning money to those who don't have this sense.

[rgs2001uk]

Interesting replies so far ... so many assumptions.... so many fatuous replies. I am not too sure as to the amount borrowed but we are talking about a young family ... I have met them, nice young chap, works himself into the ground, wife and small son. He usually gets around 7000 B a month maybe a bit more if he can get some OT. He doesn't drink (maybe the occasional Leo), does not gamble, doesn't womanise. I've seen their 'flat'. One crappy room in the middle of nowhere for 3000 B a month + power etc., etc. They live in BKK .. that is where he can get some work. So don't go lecturing me about him trying to maintain face and have the latest TV etc. Your replies indicate the depth of your understanding. My point is..these practices are clearly exploitative and in the west there are often ways to circumvent loan sharks. My questions were to do with any experiences Tv members may have had and any constructive advice to see how they can get out of their spiraling debt.

I suggest if you have nothing constructive to offer then keep your opinions to yourself.

"Interesting replies so far ... so many assumptions.... so many fatuous replies."

"So don't go lecturing me about him trying to maintain face and have the latest TV etc"

"Your replies indicate the depth of your understanding."

"I suggest if you have nothing constructive to offer then keep your opinions to yourself."

Interesting comments by the OP, somewhat perplexing coming from a man who wrote the following, not so long back,

"A couple of observations; One thing probably is clear and that is the degree to which Thais burden themselves with personal debt, whether it be in BKK for the latest iphone or out in the sticks for a new pickup etc"

"They do seem to like borrowing from all and sundry."

The above is taken from this thread,

http://www.thaivisa....le/page__st__25

My memory does still function and I can still remember what I say.... There is no arguing about Thai household debt.... if you read the post with even a modicome comprehension you would have seen that the thrust of the post was to find out about members' experiences. A couple of other observations ... I think forum rules require you to use the QUOTE button not selective quotations... also, in what way has you post contributed to the discussion thread?

I believe in your opening post you asked the question'

"What advice would you give to help these people get out of their spiraling debts?"

Advice has been given, if the fellow chooses to take it onbaord or not is of no concern to me.

Your replies highlighted in bold above, only confirm what you stated on a previous post, yet you chose to deride people for pointing out these lifestyle choices made by the Thai.

Many people knock BGs on here, but they offer one simple outlook on life, "not my family not my problem".

Its an outlook on life my wife and I subscribe to, thats not to say deserving cases go ignored, they dont, however I am not here to lend a helping hand to every Tom Dick and Somcahi who cant accept personal responsibility.

Heres another bit of advice, tell the guys wife to do what thousands of others do in Thailand, send the kid back upcountry to be looked after by the grandparents, that will free her up to get a job and help the family out of this spiral of debt.

[chiangmaikelly]

Yeah, these people need some protection against a lack of common sense that many people develop before they are even teenagers. Of course, those are the people who typically grow up and end up loaning money to those who don't have this sense.

In another place they would be called bankers. Or brokers. Or MBA's.

[CPH]

Had a friend whose father was a loan shark, actually rode int he car one afternoon while she collected from clients.

certainly wouldn't call him scum he was a very nice and kind man offering my a bed in his home and food from his table.

whether or not his job is ethical well i don't know the circumstances of his customers or his business to comment.

in the regards to the situation you described did they have access to cheaper debt? what were there alternatives? to be frank if i had to choose between a childs education and poor terms of debt, providing a can service the debt i would choose the debt any day.

in Australia, unsecured loans are around 14%, credit cards charge around 20% and these are for people who are accepted by banks for debt. if you have to go to a non-bank lender you can get screwed much much harder.

the Thai's who borrow from loan sharks should be looking at banks first if they can get approved, if they cannot get approved what solution do you suggest outside of a loan shark?

Maybe he is not so kind and friendly if people can not pay. The problem in all this is that loans in the grey and black market should not be available at all. People should be protected from loan sharks by the law and that law should be enforced. Then people would not be able to take up loans they cannot afford, because if they could afford the loan they would most propably be able to get a loan in a bank. It is as simple as that. Why do we as westerners suddenly defend loan sharks. We are all protected by the law in our old countries.

50% of the Thai economy is black or gray market economy. The Thais like black and gray market economy as they like black and gray market loans that go along with the black and gray market economy. That you want to protect them like your nanny wanted to protect you if of little concern to Thai people. If you or the Thai people want to be protected like in your old country don't let the door hit you, ya? I mean no one is stopping you from going there to be protected. However this is Thailand and your old country rules have little relevance here. Thais eat rice. French eat bread. Thais take a lot of showers French don't.

I do not need any protection, but sometimes you have to protect people against their own stupidity. Thats what we call civilisation. The rules from our old countries will of course also come here, just a matter of time. That is called development. Thailand is still an under developed country.