Moneylenders and thier ways:- shocking
July 2, 2008 6:10am CST
I was shocked to read an article about a particular locality in the city that I live in . The article was about people who seek finance privately and do not go to lending institutions. This locality is famous for its moneylenders and more for thier notorious ways of sucking the life out of people. They give the loans at extremely high rates of interest As high as 8-10% per month on some occassions. If a particular installment is missed, the interest rate is increased if not doubled. Then the toughies are sent for the collection. The worst part is if the borrower decides to foreclose the loan, the money lender makes it very convenient to make himself not available and puts off the borrower meeting him in some way to ensure that he is continuosly in his debt. Once the person is stuck he is more so for life. The only way a few people have have got out of this is by using the influence of political people or the cops.
24 Nov 08
What do you think the banks do? Don't they do the same thing. They lend money on mortgage of property or asset on 10-15% interest! And you must be knowing how the recovery agents work and how finally the goons who have connection with cops adopt horrific mand to get the money back! I think, when someone takes loan he must be responsible for what he is doing and paying it back in due time. It wrks both ways. But I do not personally approve iof extreme means which could have been sorted out in courts or otherwise. But knowing from a horse's mouth, there are some people who are tough nuts and are paid back in their own coins. I am not sure as to which part you are referring to. If it's rural India, they loan seekers should be counselled before hand to avoid extortion and intervention of some third party from some organisation or government could actually help reduce it to some extent. Thanks.
24 Nov 08
Mimpi, This is actually a locality in the heart of my city. The sharks have the cops in thier pocket and operate freely. While banks today charge upto 24% on an annual basis (upt 2% on amonthly basis, these guys charge upto 10% on a monthly basis. Five times more the interest rates. Unfortunatley the people who have got stuck , never semm to get out and often have to resort to outside intervention to resolve this. I do fully agree that the responsibility to pay back lies with the borrower, ubt i can't help but feel sorry for them when i see them falling for this trap. Thanks for the response
24 Nov 08
Yes Mimpi, 10% a month. Although there were a lot of people who were aware of this and it was brought to the spotlight by the media around the time i started this discussion .But knowing how these people operate, i am sure they would have kept a low profile for sometime and would be back to thier old ways now. It is indeed extremely shocking.
2 Jul 08
They are horrible people, the ones we have here in Uganda are are really mafias, they can confisticate your land your house for every thing you have, should you fail to pay borrowed money in time agreed. I just Hate money lenders- I rather stay poor, I wont borrow any money from a money lender.
10 Jul 08
I think one of the things about debt is that people become quite immune to it or rather they tend to forget that debt is not a bad thing but you must know how to use it. I think the financial industry makes it a point to keep people ignorant about debt so that they can keep themselves in a job. Like you, I think both the legitimate and underground financial system have moral issues in the way they work to keep people in debt. I suspect the main difference between a bank and a money lender is the method in which they work to keep you in debt. The money lender's techniques are more crude - they have very high interest rates and they use fear an intimidation to ensure you keep paying but cannot get out of debt. The banks are more subtle - they sell you the image of a lifestyle you would like to achieve. You see images of happy people who can afford things because they have easy access to cash. Of course, what they don't tell you is the fact that if you don't upkeep the payments to them, they will take legal action against you and kill your access to conventional funds. Once again, I may be wrong about this, but I remember reading somewhere which said that banks get very upset with customers that make advance payment on their monthly installment plans (mortgages and car loans in particular) because they lose interest income. It's strange that so much of the modern economy depends on people being in debt.
• United States
24 Nov 08
Well, yes, it is a Shame there are places like this, and actually that is one of the main reasons why the US is in the Economic dilema it is in for sure. When you keep on allowing these high Interest places to exist, and nothing can be done for them to continue to raise interest rates, say they never receive payments, etc. to where you pay them back $10,000 for example on a $3000 dollar loan, it is a shame. These type of places need to be stopped, and places made to help people out more again so people can quit turning to places like this for sure.