Owe Money Pay Money

By Clara Huang

He has a house he does not dare return to. For the past few weeks, the door of his flat in Tampines has been splashed with paint and locked with a steel chain. Samuel, who asked to be identified only by his first name, had chalked up huge debts after taking out a loan for his new business venture.

“My business is doing badly and I can’t repay. Then the boys wrecked havoc right away,” he said, referring to the loansharks who caused his family to seek refuge at a relative’s house.

Despite the relatively low crime rate in Singapore, the city-state has been plagued by a surge in loanshark-related violence in public housing estates. According to Ng Boon Gay, director with the Criminal Investigation Department, said that there was a 58 per cent increase from the previous year. There about 18,600 cases of illegal loans made by loansharks in 2009 alone.

According to the Singapore Police Force, one in five of those arrested for loan sharking and intimidation last year was aged 19 or under, compared with just one in 10 in the first half of 2008.

Loansharks lend money at exorbitant interest rates to those whose credit ratings are too poor to borrow from banks, drawing them with the promise of quick cash and fast approval rates.

These unlicensed money lenders then recruit runners to assist them in harassing the debtors who default on repayment. While some of the runners are lured to these nefarious activities to earn easy money for deceptively simple work, others do so to pay off their debts.

Tan Wei Boon, a former debtor of the illicit loansharks who almost caused his family to break up, said, “They gave me an option to repay back.”

He also said they asked him “to join them to be their runner. But I refused because it’s illegal.”

In fact, some loansharks have even made innocent neighboring households the target of threats, hoping that the pressure would force the debtors to repay their debts.

34-year-old Lim Yi Qi is among the residents who are upset that the peace of her neighborhood is disrupted.

“They broke my flower pots outside my house. My family and I are innocent and I’m really worried for my family’s safety, especially my daughter,” Lim said.

“Police should also hold borrowers accountable as their reckless borrowing and gambling habits endanger our community,” Lim added, expressing her displeasure towards irresponsible gambling addicts who have sought out loansharks to clear their debts.

While some of the borrowers are gambling addicts, government officials empathize with those who are faced with unplanned or short-term financial squeeze. At the Ministry of Home Affairs, officials announced in January that it is a criminal offence for errant debtors to borrow from unlicensed moneylenders.

Nevertheless, it is not possible to fully anticipate what new tactics the loansharks will adopt. In fact, loansharking and related harassment look set to become a greater threat to the citizens’ safety, as the Internet will allow them to perpetrate their crimes under the shroud of anonymity.

“I was told to transfer money electronically to them. Nowadays they’re more efficient than I thought,” said Samuel, recalling the first time the loan was made.

Law enforcement officers are doing their best to detect and punish all those who are involved in loansharking. The Ministry of Home Affairs is confident that the loanshark scourge can be tackled efficiently with the implementation of the new Moneylenders (Amendment) Bill in January this year.

The ministry will toughen the penalties for those carrying out loan sharking as well as those who assist the gangs. Still, unlicensed moneylending and loanshark harassment cases are not easy to solve, as there is still demand for them.

Frustrated by the thorny episode, Samuel urged people to understand the ramifications of borrowing from loansharks in spite of the easy way out.

“They should keep in mind that owing loanshark money not only causes mental and emotional strain to them, but also affect their family and loved ones as well,” he said.

Sharing the same sentiments, Tan regretted his decision to borrow from loansharks as he recounted on the turning point in his life although he has repaid his debts two months ago.

“The state should do more to help those in need of temporary financial assistance, such as slacken the bank loan policies for people like us to tight over this temporary financial burden,” Tan said.