A series of collapses of informal lending schemes in Nghe An province.

(Baonghean.vn) - In Nghe An province, numerous cases of failed informal lending schemes have occurred recently. However, many people, driven by short-term greed and gullibility, still end up suffering bitter consequences.

Nghe An: Hundreds of people in panic due to collapsed savings scheme.

1. An 8 billion VND pyramid scheme collapses in Dien Chau.

In September 2016, upon hearing that Tran Thi Soa (from Dien Thanh commune, Dien Chau district), the head of a rotating savings and credit association, had gone bankrupt, hundreds of small traders from Dien Thanh market surrounded her house to demand repayment. In their anger, the creditors seized all of Soa's belongings and vandalized her house before filing a report with the police.

Complaints from Phu Dien district, feeling indignant, went to the market management office to submit a petition. (Photo: Archival image)

It is known that from January 1, 2016 to September 16, 2016, Ms. Soa acted as the leader of a traditional game group and participated in the game with more than 100 people in Dien Chau district.

The Dien Chau District Police Investigation Agency also clarified that the victims of Mrs. Soa and her husband were not only small traders at Phu Dien market but also those in neighboring communes such as Dien An, Dien Thinh, Dien Ngoc, Dien Ky, etc., with the total amount of money lost in the pyramid scheme reaching 8 billion VND.

According to the Dien Chau District Police, the nature of informal lending schemes in markets and among the population is spontaneous, with transactions being civil agreements that the police and local authorities are unaware of. Only when the scheme collapses do the victims report it to the authorities and the police.

2. Multi-billion VND pyramid scheme collapses in Yen Thanh.

In November 2016, dozens of people in Yen Thanh district were left in dire straits when a member of a rotating savings and credit association (ROSCA) absconded with their money. Subsequently, many victims filed reports with the district police, with the total amount of money involved exceeding 35 billion VND.

According to the victims' statements, taking advantage of their acquaintance and trust, Ms. Phan Thi Thuong (born in 1975, Hamlet 7, Lien Thanh Commune, Yen Thanh District) and Ms. Phan Thi Dung (Hamlet 7, Dien Thai Commune, Dien Chau District) organized and lured dozens of people to participate in a rotating savings and credit association (ROSCA). Ms. Dung was the head of the ROSCA.

Numerous petitions from victims have been sent to the authorities.

After a short period of time, having mobilized dozens of people to contribute money to the rotating savings scheme, around mid-October 2016, Ms. Thuong and Ms. Dung absconded with tens of billions of VND from their residences in an unusual manner.

While the police were verifying the complaints from the public, in late October 2016, Ms. Thuong and Ms. Dung unexpectedly appeared at their residence. Upon learning this, many people rushed to their house, waiting for them to return the money. However, under pressure from the people, the two women declared bankruptcy and claimed they were unable to repay the money.

3. Billion-dollar pyramid scheme collapses in Do Luong.

In December 2016, many residents in the communes of Tru Son, Dai Son, My Son, and Hien Son (Do Luong district) reported to the police about a failed informal lending scheme in the area, accusing Ms. Nguyen Thi Nhung (37 years old, Dai Son commune) of borrowing money and refusing to pay her installments.

According to the complaint, more than a year ago, Ms. Nhung joined a rotating savings and credit association (ROSCA) run by Ms. Nguyen Thi Hong (49 years old, Hamlet 10, Tru Son Commune). This ROSCA had nearly 120 members from four communes: Tru Son, Dai Son, Hien Son, and My Son. Initially, Ms. Nhung paid the ROSCA installments in full. However, in August of this year, after receiving over 2 billion VND from the ROSCA, Ms. Nhung withdrew her money.

The informal lending group run by Ms. Hong has nearly 120 members from 4 communes participating. (Photo: Archival image)

"When it was other households' turn to draw lots, Ms. Nhung refused to pay her debts. Excluding the amount she had previously paid to the ward on a regular basis, the total amount Ms. Nhung has embezzled from the members is over 1.2 billion VND," the ward leader said, adding that the members had held meetings several times and agreed to go to her house to demand payment, but Ms. Nhung deliberately refused to pay and even challenged them. Furthermore, her family members even assaulted and threatened them with sticks.

This is the third time in a year that the informal lending group run by Ms. Hong has collapsed. The total amount lost in these three instances exceeds 7 billion VND.

4. The collapse of a rotating savings and credit association in the impoverished Thanh Chuong district.

Recently, in August 2017, hundreds of poor people in Thanh Chuong district who had 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.

The house of loan shark Tran Thi Oanh was locked for several days. (Photo: Archival image)

The head of the rotating savings and credit association (ROSCA) 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 ROSCA.

This place has been around for almost a decade, and people trust it so much that they've poured all their savings into it hoping for profit, mostly through verbal agreements or very rudimentary paperwork.

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.

PV(Synthetic)