English   |   ไทย
  • Home
  • About Us
  • Organizations
  • Resources
  • FAQ
  • Contact Us

Home Archives
FAQs

1. What is Micro-Credit?


2. What is a MFI?


3. Who are the clients of microfinance?


4. How does microfinance help the poor?


5. Aren't the poor too poor to save?


6. Why do MFIs charge such high interest rates to poor people?


more FAQs...

Events

July-Oct 2009 - Microfinance Training of Trainers Course
»An online training program for people interested in microfinance. Course materials are in English and in Thai.


21-25 September 2009 - Second ECHO Agricultural Conference (Chiang Mai)


Home


16 February, 2010

 

Loan sharks face govt crackdown


Three crime-fighting agencies join forces

Feb 13, 2009 (Bangkok Post)

Three core crime-fighting agencies under the Justice Ministry are set to come down hard on those involved in loan shark activities now that debtor registration has been completed.


The Department of Special Investigation, the Anti-Money Laundering Office (Amlo), and the Public Anti-Corruption Commission will join forces in the government's crackdown on backstreet lending, deputy justice permanent secretary Thawee Sodsong said yesterday.

Pol Col Thawee chaired a meeting of a government-appointed panel to tackle illegal lending yesterday to review the findings from the registration of those affected by illegal lending and map out measures to deal with the practice.

Low-income borrowers have become inundated with debt as their need for quick cash has been exploited by loan sharks charging exorbitant interest rates.

Besides charging rates way above what is required to make a normal profit, loan sharks are known to use threats of violence to intimidate debtors into making payments on time.

In December the government asked debtors to register with the Finance Ministry and apply to join a refinancing scheme designed to help free themselves from debt repayments.

Under the refinancing project aimed at attracting one million households with debts incurred before Nov 19 last year, registered debtors will be offered soft loans of up to 200,000 baht to pay off loan sharks.

The Finance Ministry says a total of more than 1.19 million people have applied to join the scheme and they have accumulated debts of more than 122.7 million baht.

Most of the debtors are in the northeastern provinces and some 1,800 cases involve unfair loan contracts.

"This is shocking. They don't know the law and they fall prey to unfair financial services.

"They signed a 15,000-baht loan contract when they were actually paid 5,000 baht. The creditor included 10,000 baht of interest in the loan contract with the actual principal at only 5,000 baht, which makes it unfair," he said.

Pol Col Thawee said the loan sharks are ruthless when it comes to ensuring repayments.

They usually have their men or networks buy the assets of their debtors, who are forced to sell them at low prices, leaving the debtors financially ruined.

Such cases are common in the northeastern provinces of Ubon Ratchathani, Surin, Si Sa Ket, Khon Kaen, Chaiyaphum and Amnat Charoen, he said.

Pol Col Thawee added that an in-depth investigation has revealed that the creditors in the 1,800 cases which have been finalised are the same.

He said the Justice Ministry is directing its attention to creditors who have more than 50 debtors on their lists and influential figures who have been implicated in illegal loan schemes.

It is widely believed that loan sharks are usually backed up by public officials and influential figures.

"Many debtors have no idea who provided the loans," he said.

Pol Col Thawee said several government officials and state enterprise employees, especially those at the railway and public bus agencies, have been devastated by backstreet lending.

They allowed loan sharks to gain access to their salary accounts and withdraw the money on payday to repay their debts.

"Some of them only have a few hundred baht left after the money is withdrawn," he said.

According to Pol Col Thawee, creditors in the Northeast are merciless.

"They are quick to seize houses and properties of debtors who cannot pay up. These debtors are tricked into signing the transfer papers," he said.

He said the DSI and the Amlo will be looking at these cases and seeing what action can be taken.

"The ministry is not assuming that all creditors have committed a crime and the government is not about to repay the debts of all the debtors. "What we are doing is ensuring that they do business lawfully," he said.

Source: Bangkok Post



Comments:

Post a Comment





<< Home

This page is powered by Blogger. Isn't yours?


Home   |   About Us   |   Organization   |   Resources   |   FAQ   |   Contact Us

Copyright © 2009 MicroFinance Thailand. All Rights Reserved.