With back to school expenses mounting, low income parents borrow from loan sharks who use threats, extortion and violence to later collect those loans.
Read a previous Bangkok Post behind the scenes investigative journalism on how illegal "loan shark" lenders operate in Bangkok (Read article).
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Winai: Police should do more to help: Loan sharks defy crackdown, Underground debts pile up over start of school term by Wassayos Ngamkham
Loan sharks preying on low-income parents who borrowed from them to pay back-to-school expenses for their children are posing a headache for police.
Hundreds of parents nationwide are thought to have turned to underground lenders to cover their children's school expenses for the new term, which started last Wednesday.
Less than a week later, loan sharks are now busy collecting their debts.
Charging interest of up to 5% a month, loan sharks resort to threats, extortion, and physical assault to recoup their investments.
Pol Maj Gen Winai Thongsong, deputy commissioner of the Central Investigation Bureau and head of a newly established centre for cracking down on underground lenders, said the number of loan sharks is growing as they take advantage of the demand for their services.
The centre started blacklisting loan sharks from the beginning of the year.
It is also working on a database of loan shark activity.
Police can take action against loan sharks only when borrowers file a complaint.
Borrowers enter arrangements with lenders voluntarily, and police are reluctant to step in unless something goes wrong, such as when the borrower defaults or misses payments, and the lender starts resorting to threats or force to compel payment.
Pol Maj Gen Winai said police once regarded underground lending as a petty crime, but now take a more serious view of the activity, as the heavy debts which low-income people incur can ruin their lives.
The school reopening period was a busy time for loan sharks, he said. Demand for underground loans is also high over New Year and Songkran.
Police are keeping an eye on the better-known ones. No figures are available on how many arrests have been made
Pol Maj Gen Winai said most loan sharks are highly organised, influential people who include politicians and state officials.
Lenders often work in teams that include brokers, money collectors and thugs. The brokers usually travel on motorcycles in search of customers at markets
Thugs extort money from borrowers and assault those who cannot repay their debts.
"Thugs and gunmen disappear from some areas, only to re-emerge working for loan sharks because the money is so good," Pol Maj Gen Winai said.
Chanthaburi is among provinces where loan sharks are most active.
One major lender is known to have more than one billion baht in capital to run his business, and 100 staff. Most thugs in Chanthaburi work for him, said Pol Maj Gen Winai.
Almost 6,000 people are thought to work in the illegal lending business. Of them, 2,795 are lenders and the rest, money collectors and thugs.
Bangkok has the highest number of loan sharks (899) followed by Uthai Thani (578), Chai Nat (204), Chanthaburi (202) and Nakhon Ratchasima (197).
As many as 1.18 million people nationwide have borrowed from loan sharks over the past few years, with Bangkok having the largest number of debtors, followed by Surin, Buri Ram, Nakhon Ratchasima, and Si Sa Ket provinces.
The government has helped settle the loan-shark debts of 440,000 people through refinancing schemes with state banks.
Thanai Aphichatseni, deputy chief of the centre which cracks down on underground lending, said police should do more to crack down on loan sharks.
"If the police do nothing, the number of illegal money lenders will grow quickly," he said.
In November last year, Prime Minister Abhisit Vejjajiva said illegal money-lending posed an obstacle to the government's plan to bolster the economy.
Illegal money lending is not just a personal or a family problem," he said.
It is also related to national security, law and order, law enforcement, underground influence, violence and crime.
The government launched a scheme to free the poor from the clutches of loan sharks.
Under the scheme, about 1 million households were to be offered soft loans with a limit of 200,000 baht each to pay off loan sharks
Six government banks joined the scheme, offering an annual interest rate of 12% in the first three years
The Government Savings Bank, however, would offer a special rate of 0.75% per month, or 9% per year, for the duration of the scheme.
Under the law, lenders can charge no more than 15% a year
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(Source: Bangkok Post, Winai: Police should do more to help, Loan sharks defy crackdown, Underground debts pile up over start of school term, 23/05/2011, Wassayos Ngamkham, link)
loan - an amount of money that a person, business or country borrows เงินกู้
loan shark - an illegal lender (charging illegally high interest rates and using collection methods that are illegal too)
prey on - exploit, use a people for your own gain and benefit and hurt them
defy - to refuse to obey or accept someone or something เป็นปฏิปักษ์ต่อ
crackdown - strong official action to punish lawbreakers การปราบปรามขั้นเด็ดขาด, การใช้กำลังเข้าปราบปรามของเจ้าหน้าที่
debts pile up - borrowing more and more money, so that you owe people more and more money (that you must pay back)
back-to-school expenses - things parents have to buy their children when they go back to school (books, clothes, unofficial fees)
posing a headache for police - making the work of the police difficult
nationwide - throughout a whole country ทั่วทั้งประเทศ, ทั่วประเทศ
turned to Y - chose Y (after other choices failed)
lending - the activity of giving money to someone who agrees to pay it back in the future การให้ยืม
lender - people who give or lend money to other people for a period of time
underground lending - illegal lending
underground lender - illegal lender
underground loans - illegal loans
cover expenses - pay the costs of some activity
collecting debts - the process of getting back money that was loaned to people
interest - payments made for the use of another's money for a period of time
resort to threats - use threats (chosen when everything else fails)
extortion - the crime of trying to obtain something by force or threat การขู่กรรโชก รีดไถ
physical - real things that can be touched and seen (not just an idea or legal right)
physical assault - attacking someone violently การทำร้ายร่างกาย (See Wikipedia)
recoup investment - get back the money you invested in a project or business
deputy - the person whose rank is immediately below that of the leader of an organisation รอง, ตัวแทน,ผู้รักษาการแทน
commissioner - a member of a commission, a group of people who have been formally chosen to discover information about a problem or examine the reasons why the problem exists
newly established - created a short time ago
cracking - breaking large hydrocarbons into smaller pieces (See explanation)
take advantage of - use an opportunity they have (do something they wanted to do and finally had the right situation to do)
demand for their services - people needing or wanting the service they sell (lending money for a period of time
blacklist (noun) - a list of people or organizations that have done something wrong (so must avoid)
blacklist (verb) - put someone on a blacklist
database - a large amount of information stored in a computer in an organised way ฐานข้อมูล
complaint - when someone says that something is wrong or not satisfactory การร้องเรียน
file a complaint - make a formal request for government to take action against someone ยื่นคำร้อง
voluntarily - done because you choose to do it rather than because you have to ด้วยความสมัครใจ
reluctant - do not want to do something (so are slow, hesitate, or do without enthusiasm) ไม่เต็มใจ, ลังเลใจ
step in - get involved in a problem to help solve it, intervene
reluctant to step in - don't really want to get involved in a problem (so slow and hesitant)
misses payments - not make payments on time
default - not make payments on time (which breaks the loan contract, so the bank can take the collateral if it wants to)
lender - someone or something that lends (allows to be borrowed) money, especially a large financial organization such as a bank ผู้ให้ยืม,ผู้ให้กู้
resort to Y - use extreme method (after you havetried easy ways to achieve some goal) (example: when the borrower would not pay back the money after being asked nicely, the loan shark resorted to violence)
resorting to threats - using the extreme method of threats of violence to get back their money (when nothing else works)
force - make a person do something they don't want to do (by threat of violence, for example) บังคับ
compel - same as "force"
compel payment - force a person to pay you (by threats of violence, for example)
petty crime - not a serious crime, a minor crime
incur - do something so that you owe money to another person, or do something to lose money (examples: incur charges, incur costs, incur a debt, incur an expense, incur a loss)
keeping an eye on - watch carefully (to make sure there is no problem)
figures - statistics, numbers describing the economy
influential - powerful, can control events because they are powerful ที่มีอิทธิพลต่อ
influential people - powerful people
state - government รัฐ
state officials - people who work for the government at a higher level and have the power to make decisions
money collectors - people who collect money for other people (often using illegal threats and means sometimes hurting people and even killing people)
thug - a violent criminal
search - to look somewhere carefully in order to find something ค้นหา
re-emerge - appear again (after diesappearing for a period of time)
active - working, operating, doing its job
capital - money invested in a business (See glossary)
staff - workers, employees พนักงาน
illegal - against the law ผิดกฎหมาย, นอกกฎหมาย
debtors - people or companies that owe others money
settle - to reach a decision or an agreement about something, or to end a disagreement แก้ปัญหา
settle debt -
refinancing - getting new funds to operate the business
schemes - a system for achieving some goal
refinancing scheme - a government program for giving out new loans to replace old loans from loan sharks
obstacle - a difficulty or problem that prevents you from achieving something อุปสรรค ขวากหนาม
bolster - to make something stronger or more effective ทำให้เข้มแข็ง
security - the need to provide safety from attack, harm or damage ความปลอดภัย
national security - the activity of making safe or protecting the whole country from harm
law enforcement - making sure a law is obeyed and punishing people if it is not obeyed บังคับใช้กฎหมาย
influence - the power to have an effect on people and events อิทธิพล, มีอิทธิพลต่อ, ชักจูง อำนาจบังคับ
underground influence - having power and influence, but in a secret and hidden way that people cannot see (because of participation in crime or corruption)
violence - physical force with the deliberate intention of causing damage to property or injury or death to people ความรุนแรง
launched - began, started เริ่ม เริ่มต้นดำเนินการ
scheme - a plan that is developed by a government or large organisation in order to provide a particular service for people แผนการ โครงการ
clutches - control การควบคุม
households - families or groups of people living together (economics treats this as a unit that makes decisions)
soft - not strict enough; weak ไร้น้ำหนัก อ่อนด้วยเหตุผล
limit - a highest or lowest amount
duration - length of time it exists