of loansharks and more

Well, as can be seen, I don’t blog about serious stuff at all. But this time, something happened (Desperate Call for Help: Loanshark…) which is of particular interest to me. Besides the fact that it happened to someone who I know on a personal basis, this topic about loansharking has been a little research topic for a little period of time too. Actually, not a little period of time…I’ve been advocating for years for borrowers of illegitimate loans to be punished under the criminal act for the longest time ever (like…more than 12 years in the making already!).

Sadly, parliament did not share the same viewpoint and thus they decided to (for the time being) not pursue the borrowers but instead place the focus on the loansharks. I’ve written about this, in a very satire manner, on Facebook but it’d be unwise to post that out so openly here.

First and foremost, let me clarify something. I am not against the loansharks trying to make a living by lending out money. I am also not against those who need a temporary loan and had no other avenues to turn to but the loansharks. To me, both are just coinciding factors in the demand and supply chain.

What I am against is the lack of responsibility on the part of the borrowers to avoid paying back the loan; the lack of morals of the borrowers who went back against their promise and hit the very hands which helped them in times of needs; the particular reasons such as gambling/drug addictions which pushed the borrowers towards the loansharks. Thus, with the above, I feel borrowers of illegitimate loans ought to suffer the same punishment as the lender.

What I am also against are the methods the loansharks use in their attempts to recover their ‘bad debts’; such as vandalism, gluing of locks, placing of additional locks, arson and other means to intimidate NOT the borrowers but the families/neighbours of the latter.

The government felt, not in the exact words, that by outlawing the borrowers, it’d give more leeway to the loansharks and their activities. Does it? Will it?

By sheltering the borrowers, it creates a false ’safe haven’ for them. It gives them the illusion that they need not take responsibility for their action; for the money they had taken; for the moral agreement they had entered. And thus, even those who had no real need for the money would be tempted to borrow from the loansharks for it’d be as good as a free lunch, abet one that would follow with some inconvenience.

And, when borrowers default on their repayments, it’d push the loansharks to take more extreme measures to recover their losses. It’d also push the loansharks towards the use of violence; towards the commitment of more crimes.

Overall, it creates more social unrest instead of solving the problem outright.

But how will persecuting the borrowers solve the problem of illegitimate loans? It will, in the long run.

When there is no where for the borrowers to seek help from, they will think not just once or twice but many times before they commit to getting a loan from an illegitimate source. They will be forced to understand the moral agreement they have entered into; the fact that they themselves have committed to something very serious and that no one, absolutely no one can help them out. This will eliminate the number of borrowers and thus force the loansharks out of business, or the loansharks will have to soften their methods, lower their interest in order to ‘attract’ their potential clients. Simple market adjustments!

And when borrowers do not default on loans, the loansharks would have no reason to commit those acts of arson, terrifying others etc. And of course, should they persist in using such methods, then they should be dealt with according to the law with stiffer penalties.

Just like we cannot default on our mortgage or bank loans, borrowers of illegitimate loans should not be made to feel that they are ‘entitled’ to get away with such and that the state will ‘protect’ them from harm. This is an unnecessary burden on taxpayers.

The  most important thing is, we should delve into the reasons why such borrowers are being forced to take illegitimate loans. With every reported case of loansharking, there are more unreported cases. This is a clear indication of a lapse in our social safety net. What has happened to these people that they had no one, no where to turn to except the loansharks? If it is a genuine case of need, such as medical bills, daily expenses, school fees etc, why are these people in such a pathetic state? Why have they no helplines to turn to? Is it because of a lack of awareness? Or that the social safety net has completely failed?

And if it was not a genuine case of need, such as gambling or drug addiction habits. What made them turn to gambling or drugs? And what has been done on a national level to reach out to these people? What more should and can be done?

There are legalised moneylenders. So should the criteria to borrow money from them be softened so as to accommodate the needs of more people? Or should we examine why are there so many people in need of money for even basic needs?

A loansharking problem is not simply a problem between the borrower and the loanshark. It is not simply a criminal act but a reflection of the state of social illness. Something is very wrong and the root of the problem goes way beyond that of just the borrower and the loanshark.

Oh, let’s not go into the level of responsiveness of the police. Or the efficiency level. It’d complicate matters even further.