WHEN legal lending institutions get tight-fisted during lean times, people who are hard up and have no way to turn, will gladly risk life and limb swimming with loan sharks (Ah Longs), knowing full well they could get badly bitten if things go wrong – which is quite often.
Desperate borrowers, turned away by banks, will seek out these illegal money-lenders despite having to pay exorbitant interests and face physical violence should they default. Sadly, for the borrowers, the axiom — once bitten, twice shy — does not always apply.
Ah Longs are found not only across the waters but also in our own backyard. This is not surprising since their shady business is getting rather crowded in the peninsula. So some ‘great whites’ among the big time loan sharks are compelled to shift their activities to East Malaysia.
Ah Longs mostly lend money to people who are unable to obtain loans from legal avenues, targetting, in the main, hardcore gamblers or high-flying risk-takers. They charge a very high interest rate (about 40 per cent per month or fortnight) and frequently resort to strong-arm tactics in collecting debts.
Ah Longs’ wrath is manifested through acts such as spraying, splashing or writing threats in red paint on the walls of the house or property of borrowers to shame them into repaying their loans.
Recent cases showed Ah Longs displaying borrowers’ ICs on huge banners posted on fences. Since Ah Longs need only an IC from borrowers to close a deal, this tactic is becoming common because it also shames the borrowers publicly into paying up.
There have been cases of borrowers getting roughed up or having their property damaged or destroyed with some victims choosing suicide as a way out.
In Malaysia, loan sharks are so famous — or rather notorious — that there are even songs written for them and posted in youtube with music videos.
For those Ah Longs who are able to manage the risks involved, the business can be quite profitable but even so, loan sharking is not to be condoned because it falls outside the ambit of the law.
One high-profile police manhunt was mounted some years ago for six loan sharks high on the wanted list, including leaders of a notorious group in Selangor who styled themselves as K9 Crystal Gems Enterprise.
The manhunt followed the rescue of three men who were abducted by loan sharks after falling behind on their loan repayments. The men were said to be chained and locked up in a toilet, and even tortured.
Would such brutality have yielded any worthwhile result, considering the victims were broke? Whichever, it did not matter to the Shylocks who only wanted their pound of flesh.
The K9 Ah Long group were well-organised with a headquarters and offices at various localities and they even engaged people to do the accounting, debt collection and abduction.
However, with stepped up police surveillance and action, their presence and operations have since been nullified.
Loan sharking is nothing new to Sarawak, of course. Initially, the operators serviced local towkays, charging reasonable interests and using less savage methods of collecting debts. After a while, with increased competition, their modus operandi changed with borrowers getting charged much higher interests, based on daily, weekly or monthly rates, and threatened with violence if they defaulted.
Only the desperate will turn to Ah Longs and once sucked in, the way out is never easy. Very often borrowers have difficulties paying the interests, let alone the principals.
According to a recent study by the MCA Complaints Bureau, borrowers included habitual football pool gamblers who constantly diced with fate and their incorrigible ways meant they were constantly snowed under by huge debts.
Those who could not pay up risked the fury of Ah Longs or they just absconded in which case, the middle men, usually young people acting as the go-between, would take the raps and be forced to make good the outstanding debts.
It has been suggested that a government-sanctioned lending scheme be considered to assist small-time borrowers urgently in need of funds to tide them over a difficult period albeit on condition that the money is not to be used for gambling or paying off gambling debts and such like.
While law enforcement is to be commended for coming down hard on Ah Longs’ illegal activities, it ought also to educate the public on the dangers they are exposing themselves to when they turn to loan sharks even for small sums. The debts owed could — through defaulting — spiral upwards quickly with the cut-throat interest rates charged.