Social Commentary: Loan Sharks being too Sharp?

Imagine that you are on your way home from work. Drained and exhausted, the thought of going home and lying on the sofa would have been a fantastic idea. But what if you reach home only to find that your main gate has had paint splashed all over it and , your once delicately arranged potted plants at the corridor , now lie in a million pieces about your feet. Worst of all, written on the wall next to the gate is this: “O$P$”.

Well, this is all hypothetical. But in a recent ST article “The trouble with loan sharks”, the number of reports of loan-sharking and harassment has increased to 9395,almost double for the same period last year, here in Singapore. It is so serious that the government has vowed to go all out to eliminate this problem! I strongly agree with the government’s decision for I believe that the loan-shark phenomenon has loomed dangerously large in our society today and will inevitably create some negative repercussions.

Why do I believe such?

Current loan-sharks are not as kind as their predecessors. Not only do they harass and damage the property of debtors, they also threaten the immediate families and neighbours as well. This is a hard fact to swallow.
Associate Prof. Ho said in Parliament, “Harassment tactics have also becoming increasingly dangerous.” Not just simple door vandalisms, loan-sharks have improved their threat tactics by using petroleum bombs and vandalising vehicles with graffiti. Clearly, the loan sharks are becoming more dangerous. On top of being illegal money lenders, they have today become almost equivalent to a terrorist group if we look at their increasingly vicious methods of collecting debt. I will not be surprised when reports of murder starts occurring due to this.

What is even disturbing is that such syndicates now recruit and influence teenage students to do their biddings. Teenagers get easy money just for splashing paint. Such teenagers often fail to understand the repercussions on themselves for undertaking such jobs.

The government initiative to penetrate the multi-layer network of loan-shark syndicates is to be applauded. Not only should it help stop gullible youths from joining and being trapped in such work, it should also discourage people from borrowing from loan-sharks. To the latter’s end, there must be more alternative sources through which people can get short term financing or people must be educated on financial planning. Indeed, the government’s plan may be a promising counter-measure that can help eliminate this social menace.

Loan-shark lending destroys the social fabric in our society. How is this possible? Simple; as previously mentioned, they recruit our youths. Youth are attracted by the easy money, for work that is seen as relatively simple. They are not able to see the long-term effect of their decisions. Rather, they are myopic and accept the bait. Loan-shark lending also destroys family’s ties, especially those whose parents are in debt. This places the burden on the children as well.. The debts are usually of high interest rates. Failure to complete the debt will cause a vicious cycle whereby their children will have to pay back these debts.

It is true that loan-shark lending has its negative implication in our society. However, they still play a rather small but crucial in our society too. It is undeniable that they are able to assist and lend money to small enterprises which require quick cash which established banks are unable to offer. Though their interest rates are high, people still require these loan-shars to borrow the necessary quick cash for whatever reasons.

So indeed, loan-shark harassments are getting more serious, especially in the current economic times. However, we need to minimize the growth of these dangerous syndicates from influencing negatively on our youths and other members of society. Hence, I strongly agree with the government’s counter-measures in eliminating loan-shark syndicates.


(642 words)
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Article
Section: Review
Publication: The Straits Times 24/08/2009
Page: A14
No. of words: 461

IT IS dismaying to think that Singapore, an advanced economy with a notable financial industry, is still grappling with Third World problems associated with loan shark lending. The problem has lately been exacerbated by the economic slowdown. In the first half of this year, the number of loan-sharking and harassment cases reported nearly doubled to 9,395 compared with the same period last year. Loan sharks have also been more daring in their collecting techniques, using petrol bombs and harassing innocent neighbours. No wonder – and thankfully – the Government has vowed to engage in a war of "wits and nerves" with these criminal predators.

The various counter-measures discussed in Parliament last week – penetrating the multi-layer networks of syndicates, laws to punish loan-sharking activities and disrupting the flow of money to such networks – are all to the good. Among these, disrupting the flow of funds looks the most promising. It is clear to everybody why shadowy parties would "invest" in these syndicates. The sky-high returns on investment of several hundred per cent will make successful hedge fund managers blush. Desirability, however, does not equate to legality: cracking down on the financial wellsprings of such syndicates will deal them a body blow. It won't be easy work; sound intelligence is required.

Despite loan-shark syndicates resembling a many-headed Hydra, the police have achieved some success in enforcement action. Up to this month, nine syndicates have been crippled, which was the number for the whole of last year. But the operators are getting ever more elusive, employing hard-to-detect methods such as the use of prepaid phone cards and technology as well as money transfers by Internet. A recent report highlighted how some syndicates across the Causeway have adopted "creative advertising", like in conventional banking practice, to lure the ignorant into their trap.

To up the ante, Deputy Prime Minister Wong Kan Seng suggested in April that the authorities come down hard on debtors who, by borrowing from loan sharks, endanger the safety of whole neighbourhoods and communities. Speaking in Parliament last week, Senior Minister of State (Law and Home Affairs) Ho Peng Kee said the idea could be assessed after the impact of the current raft of measures was known. This deliberate approach is prudent. As a hit movie by the social commentator-filmmaker Jack Neo has emphasised, loan sharks fulfil a function, no matter how pernicious some people's loan dependence and reprehensible the dealers' methods. It just seems that the Shylocks of this world will always be around, simply because their Antonios need them to be. Many of their clients would be people who have fallen into debt through bad habits like gambling, but there are also small business people who need quick cash. Whatever, there can be no let up on enforcement action.