Nghe An: Hundreds of people in panic after a failed informal lending scheme.

(Baonghean.vn) - Hundreds of poor people in Thanh Chuong district who contributed money to a rotating savings and credit association (ROSCA) to earn interest were suddenly left in a state of panic when the ROSCA leader declared bankruptcy and had no money to repay.

These days, in Hamlet 5, Thanh My Commune (Thanh Chuong District), people are still buzzing with talk about Mrs. Tran Thi Oanh, a resident of Hamlet 5, Thanh My Commune, declaring bankruptcy and having no money to repay the people in her informal lending scheme.

Tens or hundreds of millions of dong, accumulated over a lifetime by the people, have been swept away right before their eyes by the "storm" of informal lending schemes.

Ms. Nguyen Thi Tuyet (63 years old), from Hamlet 7, Thanh My Commune, is a particularly difficult case. Sitting dejectedly in her tiny 20m2 house, she choked back tears, "40 million dong is a huge amount of money for my family. My son is 36 years old this year but has Down syndrome, and it's just the two of us, so our situation is very difficult. We intended to save that money to renovate the house at the end of the year, to prepare for times of illness, but now it's all gone..."

The house of loan shark Tran Thi Oanh has been locked for days. Photo: Ngo Quyen.

Mr. Vo Van At (born in 1962), from Thanh My commune, is also a victim of the failed informal lending scheme. He said: “Every month I receive a salary of 7 million VND, and I put 5 million VND into the scheme, plus the money my children give me. To date, the total amount invested in the scheme has exceeded 300 million VND. All the money I saved for years to enjoy a comfortable old age is now gone.”

The head of the informal lending group mentioned here is Ms. Tran Thi Oanh, residing in Hamlet 5, Thanh My Commune. Due to her existing connections with small traders, Ms. Oanh mobilized contributions from traders in the market and paid them interest. Gradually, seeing the high interest rates, many other people also joined the group. This scheme has been in operation for nearly a decade, and people trusted it so much that they invested all their accumulated assets to earn interest, mostly through verbal agreements or very rudimentary written documents.

By early August 2017, Ms. Oanh declared bankruptcy, unable to repay her debts, causing widespread panic among hundreds of residents. According to residents, the actual amount owed was much larger than the 8 billion VND and the 100 people who filed complaints.

Ms. Tuyet, already in difficult circumstances, is now facing even greater hardship due to informal lending schemes. Photo: Ngo Quyen.

Regarding this matter, Mr. Pham Xuan Luc, Chairman of the Thanh My Commune People's Committee, confirmed: The collapse of the informal lending scheme in the commune has been ongoing for several days, shocking hundreds of residents in the area and neighboring communes such as Hanh Lam and Thanh Lien. Due to the people's greed for high interest rates, dozens of poor households in the area also participated in the scheme. Currently, the scheme's organizer, Ms. Tran Thi Oanh, is under house arrest.

Mr. Vo Van Tinh, the head of the Thanh My commune police, said that currently more than 100 people have come forward to report and declare the amount of money they were defrauded of, totaling nearly 8 billion VND. However, it is certain that the actual amount is much larger, as people have not yet dared to come forward to report it.

The case file has now been transferred to the Thanh Chuong District Police for investigation and clarification.

Ngo Quyen