| 31 Jul 2010 |
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Indians, Filipinos fall prey to loan sharks
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Officials say an increasing number of Indian and Filipino expatriates are turning to loan sharks to help them cope with economic difficulties.
According to The National, lenders charge exorbitant interest rates, demand passports as collateral and took blank, signed cheques from accounts in India or the Philippines, said K V Shamsudheen, founder of Pravasi Bandhu Welfare Trust, an organisation that advises expatriates on debt
"Demand for money from family members for emergencies like medical treatments, marriages, education and, sometimes, even adjusting to inflation of livelihood compels them to take loans," he said.
The loan sharks, or "blades", attract business through word of mouth, the National reported. They can lend any amount between Dh500 to Dh100,000, usually for a short term. If customers cannot repay on time, the amount that they owe doubles or the lender threatens to cash their cheques.
If a cheque fails to clear, an account holder can be sent to jail. As an additional threat, loan sharks had "recovery teams" - thugs - who pressured and intimidated borrowers into paying, said Nasser Munder, the labour attache at the Philippine overseas labour office in Abu Dhabi. Such teams operated in the UAE and many Asian countries, he added.
It was illegal for individuals to engage in the money-lending business, Mr Munder said.
Although Sharia law did not allow lenders to charge interest, there were those who took advantage of people who badly needed money, said Karunagappally Shamsudeen, a lawyer at Al Kabban Advocates and Legal Consultants in Dubai. People whose passports were held could turn to police for help in recovering them, as that was also illegal, he said.
By Staff
© Emirates Business 24/7 2010
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