Rural villages in turmoil due to informal lending schemes - Part 1: Money lost, relationships broken, villages scattered.
Over the years, in many localities in Nghe An province, the informal lending schemes ("hui, ho, phuong"), which were once familiar forms of mutual capital assistance, have transformed into high-interest investment channels, attracting thousands of people with the belief and expectation of getting rich. However, behind these attractive promises are numerous failed lending schemes, with organizers declaring inability to pay or absconding, leaving many families penniless and burdened with debt. This situation reveals legal loopholes and a lack of understanding among the people.
Content:Tien Hung /Present:Tran HaiApril 29, 2026
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Over the years, in many localities in Nghe An province, the informal lending schemes ("hui, ho, phuong"), which were once familiar forms of mutual capital assistance, have transformed into high-interest investment channels, attracting thousands of people with the belief and expectation of getting rich. However, behind these attractive promises are numerous failed lending schemes, with organizers declaring inability to pay or absconding, leaving many families penniless and burdened with debt. This situation reveals legal loopholes and a lack of understanding among the people.
For the past four years, many residents of Dinh Phung hamlet, Yen Thanh commune, have been relentlessly seeking out the head of the informal lending group hoping to reclaim the money they paid. Failing to get their money back, numerous altercations have occurred. From neighbors who had known each other for generations, even family members, they now view each other as enemies because of these informal lending groups.
In mid-April, in a small house in Dinh Phung hamlet, Yen Thanh commune, Mr. Vo Van Chinh (79 years old) was flipping through a thick stack of documents, preparing for his upcoming complaint. For the past four years, Mr. Chinh has persistently pursued the lawsuit, claiming that the head of the informal lending group he participated in had embezzled his money. Along with sending petitions for help, every month, Mr. Chinh and others in similar situations diligently went to the head of the lending group's house hoping to get their money back. But after those attempts, they failed to recover their money; in fact, he was even beaten so badly that he lost a tooth during one altercation.
Mr. and Mrs. Chinh are both war invalids and receive monthly allowances. “Our children are all grown up and live separately now. The two of us rely on our war invalid allowances, and by being frugal with our monthly expenses, we've managed to save a sum of money for when we get sick. Seeing that all our neighbors are participating in the community association, we decided to join too,” Mr. Chinh recounted.
Mr. Chinh said that he and the family of Ms. Hoang Thi L. (48 years old), the owner of the ward office, are close neighbors. Ms. L. has been running the ward office in the area for many years and has always paid regularly. Ms. L.'s husband and children have stable jobs and are a well-off household in the village, so he trusted her completely.
The lottery group that Mr. Chinh participated in was a bidding group. Every month, it was a turn to draw lots, and the member who bid the highest would get to draw. The winnings from that draw would then be shared among the members who hadn't drawn yet. Initially, Mr. Chinh cautiously participated in one lottery group, contributing 2 million VND per month. "Depending on whether the person who drew the lot bids high or low, usually each 2 million VND lottery group I contributed would bring in over 100,000 VND in interest each month. That's much higher than if I put it in a savings account at a bank," Mr. Chinh recounted.
Seeing the regular interest payments, Mr. Chinh discussed with his wife and pooled all their savings to participate in 14 informal lending schemes, each costing 2 million dong per month. Since they didn't need the money for anything, they didn't participate in the monthly bidding, relying instead on the interest they received after others won. Before the scheme collapsed, Mr. Chinh and his wife had paid a total of nearly 400 million dong to the scheme's organizer. "That amount was our entire fortune," Mr. Chinh said, tears welling up in his eyes.
November 3, 2022, was the deadline for members to pay their lottery fees. Mr. Chinh recounted that after collecting the money from everyone, Ms. L. said that it was the lottery operator's turn to draw lots this month. However, after collecting all the money, Ms. L. unexpectedly announced the suspension of all lottery draws under her control and chased the members away without explanation. Distressed by the loss of their money, Mr. Chinh and the other members repeatedly stood outside the lottery operator's house demanding their money back, but only received defiant responses from Ms. L.'s family...
In an attempt to pressure the ward head, they resorted to all sorts of tactics, even bringing banners and signs and playing funeral music through loudspeakers right in front of Mrs. L.'s house to demand money. On one occasion, during a gathering in front of the ward head's house, a fight broke out, and Mr. Chinh was beaten so badly that he lost a front tooth…
Despite being beaten and chased away, Mr. Chinh did not give up. For nearly four years, the old war veteran has tirelessly sought out the ward chief's house hoping to recover even a small portion of his money. Many times, Mr. Chinh humbled himself before his neighbor, who was young enough to be his son, even begging for the ward chief's sympathy, but to no avail. Mr. Chinh is not alone; many others have faced similar situations, failing to recover their money and only receiving resentment. Some have even been fined 3 million dong for losing their temper and throwing rotten eggs at the ward chief…
From trusting each other through blood ties, many families in Dinh Phung hamlet now find themselves unwilling to even greet each other. The collapse of informal lending schemes not only swept away money but also tore apart community bonds, neighborly affection, and brotherly love, leaving many people with both financial losses and a loss of faith in their relatives.
Ms. Phan Thi Hoa (58 years old) said that she and the family of the head of the neighborhood association were related by marriage and still held ancestral commemoration ceremonies together in the same house. In previous years, both families supported each other through good times and bad. However, since the collapse of the informal lending scheme, they have gradually come to view each other as enemies.
According to Ms. Hoa, because she trusted in her family relationship, she invested all the money she had in the informal lending group run by Ms. L. She never imagined that her trust had been misplaced. “For nearly four years, I went to her house hundreds of times to demand my money back, but I was always met with defiance. The group leader told me to go to the place where I filed my complaint to demand my money,” Ms. Hoa recounted resentfully.
Ms. Hoa also said that among the victims who lost money, not only was she a relative, but there were also cases of the ward owner's aunt, nearly 80 years old, and even siblings, who were not spared. "To date, among the victims like us, five have died in despair without ever getting their money back. Many, in the final stages of illness, still try their best to go to the ward owner's house to beg for pity, hoping to receive some money for their funeral expenses, but to no avail," Ms. Hoa recounted.
Sixty people have signed a petition accusing Ms. L. of misappropriating assets totaling over 11 billion VND from the club members. The person with the largest amount owed by the club leader is currently owed over 1.4 billion VND. However, according to the club members, these are only those who have dared to come forward publicly. There are many more cases where people, hiding their involvement from their husbands and children, have been too afraid to admit their losses and remain silent.
Mr. Nguyen Manh Quynh (67 years old), residing in Dinh Phung hamlet, stated that Ms. L. began mobilizing people to participate in the lottery she ran in 2013. He was one of the first members, participating regularly for the past 10 years. However, since 2020, the lottery schemes run by Ms. L. have shown signs of a lack of transparency. “At this point, the lottery organizer no longer calls the members to meetings and public auctions at the end of the month. Many members who need money for personal matters are unable to participate. Ms. L. always says someone has already won, but we don't know who it is,” said the man who claims he is owed 230 million VND by the lottery organizer.
Not only did she run her own lottery scheme, but before announcing her closure, Ms. L. also participated in a series of other lottery schemes run by different people. In these schemes, Ms. L. would often bid very high prices to secure the lottery rights first, but after receiving the money, she refused to pay the remaining installments. As a result, numerous other lottery schemes were also affected, causing chaos in Dinh Phung neighborhood.
Mr. Hoang Manh Linh, Chairman of the Vietnam Fatherland Front Committee of Yen Thanh commune, said that before the merger, Dinh Phung hamlet belonged to Hop Thanh commune (formerly), and at that time, he was the Party Secretary and Chairman of the People's Committee of that commune, so he was very familiar with the case. After the people submitted their petition, Hop Thanh commune (formerly) established a working group, headed by Mr. Linh himself, to handle the matter. However, despite the working group organizing four dialogues between Mrs. L. and her husband and the ward members, there was still no result because the ward leader lacked goodwill.
“According to the commune’s verification, the ward leader’s family still has a lot of assets, but they refuse to pay the villagers. During the dialogues, the ward leader couldn’t explain where the money went, only saying they would pay the people but without promising a date or a timeline,” Mr. Linh said, adding that while the ward leader showed a lack of goodwill, the victims were very accommodating. They even accepted losses, asking to receive only half of the debt, but the ward leader still refused to pay.
“Among the victims, many come from very unfortunate circumstances. Some are single, living off meager savings that they deposit with the local authorities to earn a little interest. Others are disabled and receive monthly allowances. This incident has had a significant impact on security, order, and community spirit,” Mr. Hoang Manh Linh added.
Meanwhile, according to local officials, after receiving the money from the ward, Mrs. L.'s family bought land, built houses for their children, bought two cars for the father and son to use, invested in many plots of land, and even deposited money in a bank. However, before announcing the cessation of operations, the family secretly transferred most of their assets to others and withdrew money from the bank... For nearly four years, Mrs. L. and her husband have lived in their house in the middle of Dinh Phung hamlet, with the gate almost always closed, and have not communicated with anyone.
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(To be continued)
