Black credit is transformed and 'rampant' everywhere
With advertisements of “low interest loans, no collateral required, simple and quick procedures”, illegal credit activities are “transforming” everywhere, causing many consequences for households and affecting social order and safety.
"Exorbitant" interest rates
Pretending to be someone who needs to borrow money, we followed a phone number posted on Hung Vuong Street (Hue City), and called 0941...
On the other end of the line was a young man's voice. When we asked about borrowing money, this young man invited us to the transaction address located at the front of Thuan Thanh ward, Hue city, and asked us to bring our household registration and ID card.
When we said we needed money urgently and wanted to discuss and negotiate the interest rate over the phone first, this person agreed. If we wanted to borrow 20 million VND, what were the procedures? “We lend in installments. If you borrow 20 million, you contribute 600,000 VND per day. Contributing within 40 days is 24 million VND.”
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| Loan flyers are posted everywhere on the streets of Hue City. |
When asked if the interest rate could be lowered, the young man on the other end of the line replied: “How high is that? It’s World Cup season, many people have come to beg but still haven’t been able to borrow at that rate,” and then hung up. So, for a loan of only 20 million VND within 40 days, the borrower has to pay 4 million VND in interest.
In fact, many people who are in need and in a deadlock have to resort to “black” credit and will immediately be drowned in a spiral of “interest begetting interest”. Ms. Tran Thi Sen, a trader at An Cuu market, Hue city is an example.
She said that in early April 2018, her family had an urgent matter but did not know where to turn, so when she saw a note posted outside the market area about lending money.
Following the phone number, a young man came to meet Ms. Sen in person and looked at the electricity bill, then agreed to lend her 20 million VND.
When asked about the interest rate, Ms. Sen said the interest rate is 3 million VND/month: "The interest rate is too high, but because I need the money urgently, I have to accept the loan. The interest is paid monthly, if paid late, it will be added and then interest will be calculated," Ms. Sen said.
Police are checking loan shark groups
According to some officials in the banking industry, there are currently two popular forms of loans: unsecured loans and mortgage loans. For unsecured loans, borrowers need to prove their income and confirm their place of work, and for mortgage loans, borrowers must have fixed assets as collateral.
As for the form of quick loans and daily installments, it is called “hot” loans. This type of lending is outside the framework of the banking system and does not comply with the provisions of the law on credit and banking activities.
Unlike financial companies that lend unsecured loans with high interest rates but with certain constraints such as the borrower having a stable job, a purpose for using the capital, and proof of income.
As for "black" credit, it only requires verbal agreements, does not clearly state the interest rate, and does not have legal documents, so borrowers face many risks.
In Thua Thien Hue, in recent years, the form of “black” credit lending has been taking place widely and openly in the form of financial lending. On the routes from the city to the countryside, flyers are posted everywhere.
At red light intersections, there are some girls who come and give out business cards introducing the lending location and contact phone number.
It is worth mentioning that some financial lending locations have public addresses and transaction offices; others only have phone numbers, when customers need to call, they will provide the address to make the transaction, or some places, customers just need to say where they are and a loan officer will come to meet them.
According to Colonel Dang Ngoc Son - Deputy Director of Thua Thien Hue Provincial Police, recently, many people have become "debtors" after borrowing money from loan sharks under the guise of unsecured loans. This is a "black" credit activity that violates the law and needs to be strictly handled.
“Although the provincial police have proactively promoted and planned to prevent and combat this crime, the situation is becoming increasingly complicated.
Currently, the provincial police have directed units and local police to check loan shark gangs that cause disorder and insecurity to prevent and combat them," said Colonel Son.
