By ucanews.com reporter,
Mary Do Thi Vui works hard at a restaurant in Hanoi for a salary of 7 million dong (US$302) a month. She tries to economize on her daily basic needs to save more than half of her salary. Her children working in other places also send money to help her pay debts.
“Every month we have to pay interest charges of 1.5 million dong to a bank and another 4.5 million dong to a loan shark. If we delay the payments, gangsters will threaten to set our house on fire or kill us,” 46-year-old Vui said in tears.
In 2015, the Catholic woman and her husband borrowed 500 million dong from the bank and loan shark to build a house and buy a delivery van for her husband’s business of making door frames.
But she and her husband had regular quarrels about money as they struggled to meet payments to the lenders. The bank seized their house while they sold the van to partly pay back the loan shark. Their marriage broke up when her husband left her and their two children and married another woman.
Vui’s sister last year lent her money to redeem part of the bank loan and get back the house, which is worth about 300 million dong. She still owes the bank 150 million dong and the loan shark 50 million dong.
“Now I know that we were swindled by the loan shark, who lent us the money at exorbitant interest rates with unlawful lending conditions,” said Vui from My Hung parish in Yen Bai province
Joseph Nguyen Quang Hai, a victim of usury, said loan sharks and some private banks cheat poor people by using favorable conditions to lend money without collateral. Borrowers only give them copies of personal papers and phone numbers.
Hai, a former compulsive gambler, borrowed 30 million dong from a loan shark three years ago to gamble at cards and lost it all. The father of two was asked to pay 4.5 million dong of interest on the loan per month. After three months, gangsters with sticks and knives came to his home demanding he pay 50 million dong. If not, they would cut off his limbs. They did not leave his home until his wife paid off the loan.
Hai, who works as a butcher, said lending without collateral, or black credit, is advertised widely on social networks and mobile applications in Vietnam. It aims to provide money for poor people to cover medical treatment and buying houses, vehicles, cellphones and other basic items.
Experts told a Hanoi conference last December that usury flourishes in rural areas and industrial zones where poor people need quick cash in the short term. The practice involves millions of dollars.
More than 7,600 criminal cases related to predatory lending were found over the past four years in which lenders were involved in threats, murder, assaults, robbery and swindling.
The conference heard that removing usury completely is not an easy task as up to 70 percent of Vietnamese people are unable to access bank loans.
State-run Vietnamnet newspaper reported in January that the Ministry of Public Security was investigating 210 loan shark gangs who are lending money to around 2,000 people and demanding repayments at extortionate rates.
The newspaper quoted Luong Tam Quang, head of the ministry’s office, as listing several ways to identify black credit operations including lending, borrowing and capital mobilization with interest rates 10 times higher than the maximum rate allowed in the banking system, leading to insolvency.
Hai said local authorities have not dealt with or punished those loan sharks as borrowers and lenders work secretly and quickly. Victims do not dare denounce loan sharks to police for fear of being assaulted by gangsters.
In some cases, he said, victims have fled to other places and committed suicide because they could not pay back debts.
Sacred Heart of Jesus Sister Mary Nguyen Thi Phuc has managed a savings and credit program for poor women, people with HIV/AIDS and former sex workers in the central province of Khanh Hoa for 10 years.
She admitted that the lending scheme fails when many participants go bankrupt while others move to other places without repaying the money.
Sister Phuc said the program, funded by benefactors, loans women 5-7 million dong each to sell food on streets, raise poultry, grow crops or buy motorbikes to carry passengers for a living.
She said borrowers have to repay the loans in 10 months with a 5 percent interest rate and save 100,000 to 150,000 dong each month for themselves.
The program used to involve more than 100 women from five parishes but now has only a dozen from one parish.
A parish priest from Yen Bai province said some lay Catholics borrow money from priests to do business but few of them repay loans. He said parishes have no funds to support poor people to improve their lives or to repay debts.
Vui said she is paying a high price for borrowing money from loan sharks. “I pray to God to give me good health so that I can work hard to get enough money to pay off the debts.”