100% PINOY: Bangko o Bumbay?
By dzeiel091383
@dzeiel091383 (49)
Philippines
July 16, 2009 10:14am CST
Over the years, living here in the Philippines has become more and more complicated. Years ago, one can sustain his family's need for basic necessities by just making a living out of with his backyard plants and live stock. Yet nowadays that even a piece of candy costs more expensive than it used too, more and more Filipinos tend to resolve their financial problems by loan.
Some Filipinos seek financial assistance from banks for their expenditures such as payment for a house renovation (or even for a new house), business expansion, etc.
Yet, since not all Filipinos can be granted a bank loan, most rely on Indian nationals (commonly known as Bumbay from the word Bombei, a place in India) who lends money to people.
Both bank loans and Bumbay loans (also known as 5-6) has interests. Of course, that's business.
Both kind of loans help Filipinos get by especially during times of emergency financial need. Sadly though, a lot of people ended up with debts up to their necks!
I personally happen to know someone whose house had been taken by the bank because of an unpaid debt. Some people also in my town comes to hiding everytime the "Bumbay" comes around to collect payments.
How about you? ever experience having troubles in paying debts?
In times of financial needs, would you turn to a bank loan or a 5-6 loan?
1 person likes this
11 responses
@eichs1 (1934)
• Philippines
16 Jul 09
If I can loan in a bank, I won't turn to the Indians (not all of them are from Mumbai). The interest rate is too high with the Indians, besides, you will have to start paying for the loan the next day after receiving the cash. Banks have lower interest rates and you only have to pay the amount when the loan matures.
But it's really hard to loan from the local banks here in the Philippines. Well, even just opening a bank account is troublesome. (How can an ordinary farmer or a fisherman or a plain housewife produce two primary identification card? The Commission in Election is not issuing voter's ID, barangay ID not a valid one, and the postal ID is costly.) While you only need your neighbor's confirmation that you are the resident in the place you are staying to get a loan from the Indian money lenders.
@dzeiel091383 (49)
• Philippines
16 Jul 09
I agree with you. Much as most of our countrymen would like to get a loan from a more secure, legal, and organized companies like banks, it's very hard to get one. And from the responses of other myLotters in this discussion, apparently, it is easier to get a bank loan in other countries. Sigh, it's like Philippine banks have little trust in the ability of Filipinos to pay their debts. I cannot blame them though, in this state of economy we have right now, I can only expect them to protect their company/business.
But hey, let us not forget that there are things like "cooperatives" or "kooperatiba" in Tagalog that we can also seek help from. I just don't know how it works though. I know it was discussed in our class when I was in grade six but i totally forgot it now. hehe.
@eichs1 (1934)
• Philippines
17 Jul 09
But not all cooperatives are for money lending. And actually, coops for such purpose usually end up closing for unpaid member loans. Also, if a cooperative is able to lend a loan, it is very limited.
I really can't blame the bank for having strict regulations when lending. I think paying debts on time is one thing many of us have to learn. And many are getting bolder getting loans and don't have the intention to pay. Their reason, no one had been imprisoned for not paying a loan.
@bing28 (3795)
• Philippines
17 Jul 09
During rough times we really can't avoid getting into loans, even my pension is being loaned, though interest applied 2 percent a month for 15 months you'll be charge 30 percent, about 1/3 of your total pension will be deducted, and you won't have pension for 15 months, better however than 5-6. I even experience a 20 per cent interest per month from persons lending though seemed to be were just letting things more harder for us but still we're grateful, there are people we can run to in times of need. I just pray and wish there will come a time that Filipinos would prosper and no more need for loans.
@dzeiel091383 (49)
• Philippines
17 Jul 09
Whew! Even the talk about the percentage of interest rates makes me dizzy, hehehe! Come to think of it, if you're going to calculate the total amount of interest put on top of your loan, most of the time you'll be surprised on how BIG it is! Sometimes, it's even bigger than the amount you borrowed! Thinking of that, i feel like the borrower is being robbed from right under his nose. :-(
Yet, just like what you have said, most of people cannot avoid getting into loans. Instead of solving one financial concern, they end up with a bigger and harder money problem. Sigh.
@rainmark (4302)
•
16 Jul 09
I never tried to borrow money from Bumbay. When i need money, i just went to some of our family friends and lent money for 10% interest per month, when i was in Philippines.
Here in England, you can easily get loans from the bank specially if you don't have a bad records from another credit company. Coz once you have a bad record, your information will be pass to the other credit company and you will be in blacklist.
We never yet tried to borrow money from the bank e.g. loans.
But banks here in England are more supportive than Bank in Philippines, once they see that you having a difficulties in paying your debts, they gonna call you and give you an appointment to one of thier advisor to help sorting your debts and give you other options.
Happy posting.
@agv0419 (3022)
• Philippines
17 Jul 09
I agree that it is hard to borrow money in the bank here in the Philippines you need to have properties to avail the loan. When we had financial problem my mother also depend to Bumbay but you need to get items first to them before they can lend you money. The interest is very much high and it is a burden to pay it everyday. Many people here in our place depends to Bumbay in lending money for their businesses but in my opinion it can't worsen their debt and their business would not be growing if they going to depend to Bumbay. Now Indians here are rich than us because of their lending business.
@jules67 (2788)
• Philippines
16 Jul 09
This concerns money and if I were in that position, I would definitely go to the bank. I just feel that it is more secured. And financial institutions like banks, though we cannot be totally accurate now, time of global crisis, they are better compared to Bumbay or Indians. I believe that the Bumbays are charging exorbitant rates and banks now are lowering their interest rates to encourage people to borrow funds.
@dzeiel091383 (49)
• Philippines
16 Jul 09
Its really good news that banks are now lowering their interest rates. The bad news still is that of course, not anyone can be granted a loan. From the documents they ask for (which are not so easy to get by the way) to the processing of the request, everything is troublesome and in a slow pace. how about in times of emergencies? here in the Philippines, you cannot expect your loan request to be processed and granted within 24 hours.
I think banks should think of more ideas to encourage people to borrow from them instead of borrowing from Bumbays or pawning their things. they should think of ways to make the process easier.
@jaiho2009 (39142)
• Philippines
16 Jul 09
This is really true and very sad my friend.Some kababayan(countrymen)turn to Bumbay not aware that those indian nationals are taking our money back home to india.but since bumbay are the best alternative and easiest way for money loans.Banks should take a look at these thing,why they make Filipino citizen hard to avail loans when i have known from my mom who works in London how easy it is to open a credit card in there.I really wonder why banks here in our very own country won't give the Filipinos the opportunity to borrow money from them,instead of Filipinos making the bumbay earn for a living from our own money.
I don't have any against with the bumbay i know they are great help with some kababayan.
Anyway,i am thankful that i am not in any debts.
@dzeiel091383 (49)
• Philippines
16 Jul 09
Good for you, pal! hehe. I cannot blame those people who turned to 5-6 loans because, come on, will any bank here in the Philippines grant a loan from a balot vendor perhaps? Also, most of the bank loans here takes days even weeks to be processed. Sad to say that some of those loans even have a processing fee! I have a cousin, a public school teacher, who availed a salary loan in GSIS. Her loan is 15 thousand pesos. Guess how much she got after all those deductions and processing fee...a surprising seven thousand pesos! Imagine that, little by little, they are going to deduct your monthly salary a total of 15 thousand when all you get from them is just seven thousand, would you not cry in frustration?
@stricken43 (347)
• Philippines
17 Jul 09
for me, if we are to seek for financial assistance in an instant, then I'd go with those Bumbays..Banks are ok but they are requiring us these documents and it usually take long while if we are in these Bumbay, we get the money as we needed it..
@robert19ph (4577)
• Philippines
17 Jul 09
hello dzeie1091383,
That indeed is true and it's really sad to know that others are having their loan in order to survive. Neither way, banks and the Bombay are not really helping the people who are in need for their interest rates are high. Maybe temporary but if the borrower can't pay his/her obligations anymore they will get his/her collateral. It's causing a lot of stress and make the problem worts.
In my opinion, I guess I'd rather borrow from a relative or to a cooperative - need to be a member to qualify, than having a loan in the bank or in Bombay. This way, the interest rate is much lower. 
In my opinion, I guess I'd rather borrow from a relative or to a cooperative - need to be a member to qualify, than having a loan in the bank or in Bombay. This way, the interest rate is much lower. 
@neknek (249)
• Philippines
16 Jul 09
If I really need to borrow money, I usually borrow from my sister or from my friends.. I haven't tried '5-6' because I don't know any 'Bumbays' living in our area and I'm scared of the interest rates. I was still a minor when I first signed up for a bank account (bpi and chinabank) so it's wasn't really much of a hassle (they only asked for my student id and birth certificate). I haven't tried to get a bank loan because I don't think I'm eligible for one.
@mapuang (612)
• Philippines
17 Jul 09
most filipino get loan in bumbay because this is the easiest way to get loan. its so sad that our bank in the philippines is not that so easy to get loan u need to pass some requirement and its depend on their manager if you can get loan or not. and also in bank they know that u r eligible but they did not grant your loan. thats why some of us get in bumbay but not only in bumbay also some filipino that have a 5/6 business.
@pyre82 (103)
• Philippines
17 Jul 09
yes, i agree ith you that the cost of living nowadays is difficult and we cannot change that. even in US and other parts of the world they do experienced recession but let's try to focus first the core of the issue.
How do people spend their money? I mean, there are pinoys who do not know how to stretch their budget. I am lucky not to borrow from any banks or bumbay i jsut know how to budget my expenses but i have colleagues who keep on borrowing from me and from different institutions. sometimes, they don't really need the money or should i say no important expenditure they will use their money so what happens they debts gets higher and higher and the result they cannot afford to buy their neccessities.
So the best advise I can share is to know first your capacity to pay for those debts before you borrow.
@tomjoad (551)
• Philippines
17 Jul 09
five six, five six? yeah, i've heard of those bombays before. i've never tried loaning from these loansharks and i never will. i will definitely choose the bank. all my savings are in there. and if ever i loan from a bank, they have lesser interest rates. i don't really see the need for these loansharks. i don't even know why they prosper. maybe they're just very persuasive in their collection.
