Expensive village loans

[Jip99]

Sounds like a loan from the village 'loan shark' at those rates.

Many Thais work cash in hand, self employed, small businesses and don't earn enough to pay income tax, or for that matter earn enough to open a Bank account.

They have no credit rating history and therefore cannot get loans from a Bank.

If they can't secure loans from the family, local 'shark loans' are the only alternative left.

These unscrupulous money lenders use threats and violence in the event of default on payments and the interest just compounds.

The lender usually has no idea of what the total repayments will be, the collector just keeps calling every month.

not a loan shark. Loan sharks give small amounts up to like 5000 baht, unsecured at something like 2-3% per day! not 36% p.a.

I suspect this to be a normal non-bank loan from another person at 3% per month with land/chanote as collateral.

So you think that the "another person" is not a loan shark ?

5% - 10% per month is shark territory in my book.

[swissie]

You can buy a lot of Buffalo for that amount .

Buffaloes ? Rather not. But considering the amount and thinking of how many Hostesses in Pattaya I could lead to gainful employment, it makes my heart soar like an eagle.

Cheers.

[Robert24]

Sounds like a loan from the village 'loan shark' at those rates.

Many Thais work cash in hand, self employed, small businesses and don't earn enough to pay income tax, or for that matter earn enough to open a Bank account.

They have no credit rating history and therefore cannot get loans from a Bank.

If they can't secure loans from the family, local 'shark loans' are the only alternative left.

These unscrupulous money lenders use threats and violence in the event of default on payments and the interest just compounds.

The lender usually has no idea of what the total repayments will be, the collector just keeps calling every month.

not a loan shark. Loan sharks give small amounts up to like 5000 baht, unsecured at something like 2-3% per day! not 36% p.a.

I suspect this to be a normal non-bank loan from another person at 3% per month with land/chanote as collateral.

So you think that the "another person" is not a loan shark ?

5% - 10% per month is shark territory in my book.

no this is normal non-bank lending procedure in Thailand. Try once in your area to obtain a non-banking loan with land as collateral. Yoiu will see 3% per month as in this example is about normal for this. And for those who do this against property/chanote usually register such loans with the land office. So it's all officialised. The problem is that many people in Thailand are asset rich but income poor. I.e. they have a lot land which they inherited but they have little/non-regular income. For them it's hard to get a loan from a bank, sometimes they can but only after months of waiting etc.

Loan shark is 5% per day not per month. And as I previously mentioned, only small amounts, i.e. a few thousand baht. They are the ones sending around teams to scare people if they not pay interest.

hope this helps understanding it.

hope this helps.

[Nemesis7]

amazing thailand..isnt it?!!?

[jaybas]

once you are the hero and pay this demand, you will forever be hit left and right about future sob stories. You are the cash cow. i would think hard and long about the past and see where the pattern started. if this is the life you choose, if you have no problem forking over 1000's of baht each and every couple months....go ahead...left the rivers flow. Look at the track records of the 1000's of faranges before you. Do you actually think you are special. A good thai woman would never ask for money, she would work every day one, two, three jobs before losing face to you and asking for your money. Take a good look at your track record before even thinking about this.

[swissie]

Why do threads like this one resurface time and time again? Because of "Love". Elderly Farang falls in love with Thai Woman that may well be 20 to 30 years younger. Next step: Marriage, So far so good. (Sending a "selfie" back to Europe with both in the picture, would probably trigger comments like "Can't be, because.........."

Instead of playing it cool and sitting it out in a Tourist Hub with wife, Farang will soon be convinced by Thai Wife, that buying a condominium in Pattaya (in Farangs name) = Too expensive!

Have Family Land for free. That is usually the "clincher".

Works with "greenhorns" only. Naive Farang early birds are in demand.

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Have been living here for a few years and speak and understand some basic Thai and I visit Pattaya regularly. As soon as my Thai Language Skills are discovered by by the "Hostesses", the game changes instantly. Instead of "where you come from and what hotel are you staying", it's more like "Why you stay in Thailand, when so many people want to go to Europe.?"

To avoid confusion and further discussion I usually reply" Mai loo" and if that don't work it's "mai pen rai.".

Cheers.

[Jip99]

Why do threads like this one resurface time and time again? Because of "Love". Elderly Farang falls in love with Thai Woman that may well be 20 to 30 years younger. Next step: Marriage, So far so good. (Sending a "selfie" back to Europe with both in the picture, would probably trigger comments like "Can't be, because.........."

Instead of playing it cool and sitting it out in a Tourist Hub with wife, Farang will soon be convinced by Thai Wife, that buying a condominium in Pattaya (in Farangs name) = Too expensive!

Have Family Land for free. That is usually the "clincher".

Works with "greenhorns" only. Naive Farang early birds are in demand.

----------------------------------------------------------------------------------------

Have been living here for a few years and speak and understand some basic Thai and I visit Pattaya regularly. As soon as my Thai Language Skills are discovered by by the "Hostesses", the game changes instantly. Instead of "where you come from and what hotel are you staying", it's more like "Why you stay in Thailand, when so many people want to go to Europe.?"

To avoid confusion and further discussion I usually reply" Mai loo" and if that don't work it's "mai pen rai.".

Cheers.

The first question usually changes to "you have lady Buriram?"

Doesn't affect the outcome but as, swissie says, it cuts out all the greenhorn questions. Another benefit is that I never get asked to play connect 4 !

[NickJ]

Trust your Thai counterpart to handle the problems that arise is kin to giving a six year old the keys to whatever you dont want to lose....

[ozyjon]

Once you pay the loan, just remember, there will

be another one, and another one, and if you say

''darling i have no money'' you will be out the door

faster than,,,,,, you know the story, oh wait that

was me.

[gk10002000]

I read an interesting article on Asian women as to order of importance. 1: Mother. 2: Children, especially hers and not your biology. 3: Falang Husband. Is this a generalization? Perhaps. But forgetting any malice or bad ideas from the wife, this is a good rule of thumb for the family mentality you might get involved with. As for the loans, red flags all over. Thais aren't the only people that have inlaws with money or gambling issues. There is only so much you should do. Maybe consider helping once, if you can get any proof of what happened, how they are going to make money and be in the black after you pay the loan, etc. Letting them know you can't and won't help that way again.

[Kenny202]

False claims of financial difficulties in order to extract money from a gullible foreigner, should always be considered.

I was actually going to start a thread about this morning. I'm guessing you might know about these village fund loans Joe. What we're talking about here I assume aren't the Bikie type local loans but the village fund loans. I believe all moo bans were given around a million baht back in Thaksin time to distribute amongst people. The village fund would receive interest and capital would grow. On the surface sounds like a great idea.

I've heard people here talking about it and I just can't get my head around it? Apparently at this time of the year when everyones loans are due, they go and borrow the principal off someone for between 2-3% interest for 2 weeks. Lets say the original loan is 1mill Baht. The interest is paid up front and after the 2 weeks the lendor receives their 1 million baht back. How does the lendor guarantee he gets his 1 million baht back?

Now, just to be clear no one has even approached me to borrow money and I'm well aware of the outcomes of farang lending money to Thais so please no words to the wise. Only interested in how this all works as we know people participating. Does anyone know how all this works?

I believe there is a middle man who holds the money in escrow for the 2 weeks.

Are there any guarantees? I believe the borrower never actually receives the money?

How does this benefit the village as a whole? Apart from generating interest every year. I assume they not only have to pay interest to the short term lendor but

pay interest on the original loan. The village will probably never receive the original debt back

[Kenny202]

My wife works for a District office that oversees these village funds. Normally they will charge 1% per month, if the loan is repaid in a proper manner,

but 36% is "Bull"! I suggest you talk with your wife and get the truth from her or take her to your local District Office and talk with the person who

oversees those loans in your village!! This could be just a shakedown of the Falang!

I agree. 2 different things here. Bikie loans yep around 32 - 36 % sounds about right. Reason interest sounds so high is these "bikie" loans aren't intended to run a year,

only for a month or so. Of course people don't do the right thing or what they promise, and its poor them.

The village fund loan is normally 8% for the year on the principal and another 2 - 3 % to repay the loan temporarily every year when the debt is due.

You do need to clarify. Sounds like you aren't getting the whole truth, which is all so common here

[Nomyai]

Instead of "where you come from and what hotel are you staying", it's more like "Why you stay in Thailand, when so many people want to go to Europe.?"

I always ask myself "why farang want to go live in the village when those who actually live there want to get out?".

[johnno2]

once you are the hero and pay this demand, you will forever be hit left and right about future sob stories. You are the cash cow. i would think hard and long about the past and see where the pattern started. if this is the life you choose, if you have no problem forking over 1000's of baht each and every couple months....go ahead...left the rivers flow. Look at the track records of the 1000's of faranges before you. Do you actually think you are special. A good thai woman would never ask for money, she would work every day one, two, three jobs before losing face to you and asking for your money. Take a good look at your track record before even thinking about this.

extremely well said

[swissie]

Question concerning the official "Village Fund Loan" program. Is it still alive and well or has it been scrapped by the new government?

Thx & cheers.

[Kenny202]

It's alive and well for sure. That's why everyone's out harvesting their farms at the moment. It's pay up time