Thai shared money group? What is it?

[smotherb]

4 hours ago, recom273 said:

 

This is so true, Can you call my missus  and explain this because it doesn't seem to have much effect when it comes from me.

 

Sometimes you have to sneakily pick your battles - if she spends her time and Her thousand baht in this scheme at least she's not thinking about setting up her sister in business as a som tam seller.

Maybe you need to refine your selection criteria

[louse1953]

On 8/11/2016 at 7:44 PM, lopburi3 said:

Police will help obtain money if 3 people approach them with complaint so I guess it is not too illegal.  Very common savings system among working folk - it is a set amount for a set period of time with option to obtain full amount at any time if you highest bidder (extra payment amount until end).  So big risk of those taking money early doing a runner (they don't have money to make the higher payments or planned to take the money and run).  Works for small close groups however as it provides interest in the higher payments made by those taking money early and a chance for people to have cheap loan source to allow bigger purchase than they would normally afford.  

So it's a Ponzi scheme and you can bet on it that the people that run it,will do a runner or skim it.They wont call the police because that would be dobbing the mates in,even though they are thieves.In my opinion all friendship finishes after thievery but women have to live in their village and the rumour mill will start and people take sides.Living in a village is like world politics sometimes.

[louse1953]

On 8/12/2016 at 7:43 AM, rheinwiese said:

Money Game

 

It’s called “การเล่นแชร์” (gaan len share), literally means “play share”, somebody said it's originally from Chinese immigrants in Thailand. In old days they used this method for funding their businesses, since it's widely accepted and joined in all levels of Thai people, so we had the specific law for Gaan Len Share almost 20 years ago. Many business people use this funding to provide liquidity aside from their bank loans.

Gaan Len Share is different from แชร์ลูกโซ่ (châe lôok sôh), literally means “share link (chain)” which is illegal, fraud, and has been developed in the form of direct marketing - Multi Level Marketing (MLM) or Network Marketing or disguised in some franchise businesses.

Gaan Len Share - the person who sets up and manages this game is called “ท้าวแชร์” (Taao Share – ruler of the group or game), วงแชร์ (wong share) 1 วง (wong or group) can have x มือ (meu – hand or number of participants). Participant can join the group more than 1 meu, Taao Share can manage more than 1 wong or group. Taao Share should have good reputation of trustworthiness to attract people to join these shares. 

For example: this wong share has 10 meu but only 6 participants as some of them join more than 1 meu.

2 types of participant in this game, one who needs money and one wants the return (interest) which is supposed to be higher than depositing in the bank. The details in managing this kind of funding vary, mostly for their convenience and security of their money. Majority of this participant is always those who need money, that’s why the interest is very high.

For example: 5 participants (A, B, C, D, E) for 1 wong with 5 meu, 10,000 baht of each meu, A is Taao Share, they agree the day of เปียร์แชร์ (Bpia Share) is the first day of the month. 

First month: A as the Taao Share, with privilege for not paying the interest and will be the first person to get money from this wong. A receives 40,000 baht from B, C, D and E, then A gives 4 cheques 10,000 each in return to B, C, D, E 

Second month: C and D need money, both of them want to Bpia Share, at the day 1st, they write the number of interest to A, to bid this share, supposing C offers higher interest – 1,000 baht. C will receive from B, D and E 9,000 baht each, totaling 27,000 + 10,000 (from A’s cheque) = 37,000 baht, then C gives 3 cheques 10,000 baht each to B, D, E

Third month: B and D want to Bpia Share, D offers higher interest – 1,200 baht. D will receive from B and E 8,800 baht each, totaling 17,600 + 20,000 (from A and C’s cheque) = 37,600 baht.
D gives 2 cheques 10,000 baht each to B and E

Fourth month: B offers the interest 600 baht. B receives from E 9,400 baht + 30,000 baht from 3 cheques (A, C, D) = 39,400 baht. B gives 1 cheque 10,000 baht to E

E has 4 cheques 10,000 baht each, total interest earned 2,800 baht.

A – receives 40,000 baht, gives to B, C, D, E for 10,000 each
B – receives 39,400 baht, gives to A (10,000) + C (9,000) + D (8,800) + E (10,000) = 37,800 (B earns 1,600) 
C – receives 37,000 baht, gives to A (10,000) + B (10,000) + D (10,000) + E (10,000) = 40,000 (C pays interest 3,000)
D – receives 37,600 baht, gives to A (10,000) + B (10,000) + C (9,000) + E (10,000) = 39,000 (D pays interest 1,400)
E – receives 40,000 baht, gives to A (10,000) + B (9,400) + C (9,000) + D (8,800) = 37,200 (E earns 2,800)

It is a loose example from a person who used to play this game, roughly to understand how it works. There are many practices of Gaan Len Share, this kind of funding was popular among business people before the economic crisis in 1997, the amount of money circulated more than 100 million baht in some groups, millions of each meu. But many Taao Share disappeared after receiving those money in the first month, they set up many wongs and their cheques bounced.

High risk, High return, Convenience, Easily to access big amount of money. 

Ponzi.

[louse1953]

On 8/12/2016 at 2:47 PM, LivinLOS said:

People need to understand that only a decade or two ago Thailands banking system didnt really offer poor people credit and money lenders rates are exhorbitant bordering on criminal.. This system combines a kind of loan with a kind of insurance.. 

The communal bank (games) systems give people access to 1) the ability to fund a business 2) an insurance against sudden cash need (accident or illness) 3) a forced monthly savings plan and 4) a possible interest payment. 

 

Those who need money, pay the interest.. Those who are prudent, and end up not needing the money, gain interest from those who do. 

 

Its a simple and effective way of achieving multiple goals and works if the group has trust. In (past) village based communities the pressure to conform to the system is huge, anyone who rips off their friends is ostracized from friendship by the rest of the group, people didnt travel and move as much and this peer pressure was effective. Practice the same system with a bunch of transient bar girls who have few ties and its is never going to work. 

 

My wife does this with her aunties family in the village, usually one of the aunties is the pot holder, and it also gives them a social aspect, they meet, yabber about the pot, yabber about plans for the dividend, yabber about what the savings to be used for, or yabber about who borrowed the pot for what reason.. They have done small pots shorter term or longer ones with larger amounts involved.. Not once has the pot gone astray with family in charge. 

One day they will be yabbering about where the pot holder is.

[louse1953]

On 8/12/2016 at 9:03 PM, Khon Kaen Dave said:

The thing we did,did not contain any interest at all,it was purely a way of everyone of us getting a few extra baht one month out of ten.It was good fun wondering whose turn it would be that month.It worked very well for 3 years and we never had arguments or problems.I wouldn't get involved in anything where inerest was involved,thats a sure way of losing friends.Ours was just for fun.

So you just got your own money back,eventually.Where is the fun in that.I bet the person running it earn't % on it.

[Briggsy]

This schemes have a distinct lack of credit control. I suppose that is the point. If the participants were able to borrow from the bank or conventional lenders, they would. Since they can't, they use emotional blackmail and lies to get their colleagues and acquaintances to join.

 

I have lost count of the number of times I have heard about these schemes going badly wrong. The usual MO is for a debtor(s) to vanish without trace. (However Thai style, they are usually easily traced to their upcountry family village, he he, not much of a hideout)

[Khon Kaen Dave]

Louse1953.

Look mate,why does anybody have to earn a % out of it.For the last time of telling,we weren't in it for gain,interest or loans.we did it for fun and once a month someone got a few quid more.What is about that,that you dont understand?It was a fun thing.No one paid any more than anyone else.I don't care what sort of share things you are into to make money,good luck with that,but don't put down a little bit of fun being had by other people,just because you cant see the gain in it.

[Ricardo]

My Chinese-Thai MiL used to take part in a scheme like this in her home-town down-South, several friends contributed capital in various amounts, and then bid to have the use of the money, whoever bid the most (ie whoever's need was greatest) gained the use of the money for a fixed-term.

 

Every year or so the interest generated was distributed to the members, in proportion to the capital they'd put in.

 

So it was a way to generate funds available to borrow, outside the banking-system, and to generate the best-achievable return on their money for the various contributors.

 

Not a ponzi-scheme, or gambling, simply an informal mutual-credit scheme.

 

However, as others have already pointed out, it is dependent on the contributors knowing & trusting one another, or would be open to fraud or theft !

[Global Guy]

On ‎8‎/‎12‎/‎2016 at 10:37 AM, Peterw42 said:

Lots of variations on these groups. In its simplest form, a chunk of money moves around, when its your turn with the money, you use it to get a credit card, apply for a car loan, show others you have money etc. If you see the way thai people market their enterprise on facebook etc. The pictures of them, the product (slimming pills etc) and a pile of money. Its perceived wealth by association. You flash the money around to friends, family, business partners and they want to be in on the action. They buy your product, invest in your business venture etc. Then you give the chunk of money to the next person.

Its a little like the girl in the bikini holding the acme hammer drill. If I brought an acme hammer drill, I would meet girls in bikinis.

 

Ok, so it's part Ponzi scam, part loan sharking, part gambling, part typical screwed up Thai way of doing things.

 

My gf is supposedly in charge of a large group (100+ members)  but they keep getting ripped off by members, with her losing the most. I don't get how if it's a group, she's losing all kinds of money (She said about one million baht of her own money).

 

After the 4th person ripped off the group, her and another member filed a police report and met with an attorney over it. Yes, we all know nothing will come of that but I stay out of it. She has not hit me up for money so it's not a backdoor way to get something from me. She knows I won't give her money for that anyway. She has a good job so she has her own money and gives me money each month towards food, utilities, and laundry.

 

I just can't get over how someone would expose that much money to people they barely know. One member stole 300,000 and proudly stated if was for her wedding because her soon to be husband didn't have the money. She had zero shame about it, just that's what happened and "oh well" she's not paying it back.

 

I gave her an example of where I come from, what happens to people who do these things. They get taken care of in some way. But 300,000 baht? I know people have had their legs broken, their car torched to the ground, and their family paid a visit for that much back home.

 

I'll just tell her to get out of it, eat the loss, and try to do something more legit that doesn't involve Thai people.

[Global Guy]

On ‎8‎/‎12‎/‎2016 at 10:45 AM, SOTIRIOS said:

...sounds like she has you by the b*lls.....

 

...what do you think comes next.....???

 

...good luck buddy.....

 

...oh sorry....your gf is 'different'.......

Are you talking about me? What are you even talking about?

 

Has me by the balls over what? I'm not involved in this group and have not paid a baht towards it.

 

She doesn't get money from me and in fact the opposite, she gives me money each month towards food, pays the utilities, and pays for our laundry. She has a great job where she makes 6 figures each month, including an expense account, paid gas, and good salary.

 

Not all of us are with bar girls and pay them each month to stay with us.  So, yes, my gf is different if going by your context. She has her own money and I have mine.

 

What a douche. If you cannot stay on topic, scroll on by.

Edited August 15, 2016 by Global Guy
Update