||Last Updated: Aug 20, 2009 - 12:37:40 PM
When the Singapore police nailed four suspected members of a
loan-sharking syndicate on July 21, they seized the usual
paraphernalia: mobile phones and prepaid SIM cards and the time-honored
tools of intimidation such as paint to be splashed on the doors of bad
debtors and superglue to lock them inside their apartments.
But while loan sharks – or Ah Longs as they are known – have long been
a ubiquitous presence on Singapore's sprawling public housing estates,
this gang is one of a growing number taking bully-boy tactics to the
One of the members, according to the police, had been sending bullets
to borrowers in an attempt to scare them into paying up. The syndicate,
which police said was responsible for more than 600 harassment cases,
were said to have also been terrorizing the wider community by starting
fires outside the apartments of bad debtors.
Cynthia Phua, an MP from the ruling People's Action Party, told local
media in a recent interview that the level of harassment in her
constituency in eastern Singapore has surged. "It is also more
violent," she said. "We are seeing things we did not see before, like
petrol bombs and innocent neighbors being harassed."
In a city-state that proudly boasts one of the lowest crime rates in
Asia, such violence was once rare. But, worryingly for the government
and the vast majority of the population who live in the public housing
estates, it is becoming increasingly widespread as the economic crisis
forces more people to turn to loan sharks.
Although overall crime fell slightly in the first half of the year, the
number of reported cases of loan sharking and harassment more than
doubled to 9,395, according to the Singapore Police Force. The number
of people arrested for such offences doubled to 417, with a sharp rise
in the number of young people getting involved in loan shark gangs. One
in five of those arrested for loan sharking and intimidation was aged
19 or under, compared with just one in 10 in the first half of last
The police are particularly concerned about the increasing involvement
of teenagers, acknowledging that it has become one of their "key crime
concerns" this year.
While Singapore's loan sharks rarely resort to the sort of extreme
tactics practiced by their counterparts in Macau and Hong Kong –
kidnapping and sometimes murder, or pouring petrol under the door of
someone in arrears and lighting it - they are well-versed in the
language of intimidation and fear. The Singapore Ah Longs spray
graffiti on the walls of common areas identifying bad debtors, threaten
their family members and vandalize their cars and apartments. Although
they target the debtors and their families, they spread fear throughout
the community, not least because the junior loan shark runners often go
after the wrong people.
The government has blamed this crime wave on the deteriorating economic
climate in which gross domestic product fell by 9.5 percent in the
first quarter of 2009 and 3.5 percent in the second. The tough times
for the loan sharks' prey, the police say, are exacerbated by the fact
that many of the younger debtors end up joining the syndicates as
runners when they can't afford to repay their loans. And the terms are
steep, normally a usurious 40-50 percent per month if the luckless
borrowers can meet the agreed payments, i.e., if they borrow S$800,
they pay back $1,200 after five weeks. They are the lucky ones.
Defaulters are met by a demand that the borrower pay the full amount as
a penalty charge. The annual rate can thus easily top 1,000 percent.
Earlier this year, Wong Kan Seng, the minister for home affairs, said
he was considering making it a criminal offense to borrow from
unlicensed money-lenders. However, social workers and organizations
that help victims of loan shark harassment are largely opposed to this
approach, insisting that it would criminalize the desperate and the
needy, who only borrow from Ah Longs because they have no other sources
of credit, and drive the problem further underground.
"Most of the people who turn to loan sharks are from low-income
families and they usually borrow small amounts like S$200 or S$300,"
explains Ravi Philemon, a voluntary social worker and the executive
director of a charity for the mentally-disabled. "You shouldn't
criminalize people who have no choice but to turn to the loan sharks to
buy food and clothes for their families."
Philemon argues that if the law is brought in it will stop victims of
loan shark harassment from going to the police for fear that they
themselves will be arrested. "This would reduce the number of people
reporting loan shark harassment to the police but would not solve the
basic problem," he adds.
Reverend Tan Lye Keng, who runs the One Hope Centre, a Christian
organization that helps gambling addicts and loan shark victims, points
out that most people only seek outside assistance when the intimidation
and fear reaches a tipping point.
"Being chased by loan sharks is a very traumatic experience and many
people come to us in a hopeless state, feeling they have no way out,"
he says. "But we try to instill hope and let them see that they can
have a future. The proposed legislation to criminalize borrowing from
loan sharks may lead to more suicides and more people joining loan
sharks gangs as a runner."
Philemon believes that the root cause of the problem is a lack of
sources of unsecured credit for less well-off Singaporeans. He cites
the case of one family that wanted to set up a food stall and had no
other alternative than to borrow from a loan shark. When their business
faced cash-flow problems, they defaulted on their repayments and the
amount they owed spiraled from S$20,000 to S$90,000. They were
eventually forced to sell their flat earlier this year and now live in
a tent in Sembawang Park, on the northern coast of Singapore.
"We need to make loans available to lower-income families and if the
banks won't lend at the moment then the government should," he argues.
While some Singaporeans borrow from loans sharks to fund new businesses
or tide them over in a tough month, many also get into debt because of
Around 90 percent of the harassment victims who seek help from the One
Hope Centre are in trouble because of gambling debts. Reverend Tan has
found that they key to resolving the problem is not fighting the loan
sharks but negotiating with them on behalf of his clients in order
agree on a mutually-acceptable repayment plan.
"Some are quite understanding and sympathetic because they feel they're
running a business, even if it's illegal," he says. "We're not seeking
to combat the loan sharks, but to provide hope amidst hopelessness and
assistance to deal with gambling and loan-shark problems, enabling
individuals and families to resume normal life."
The Singapore Police Force declined to comment on the loan shark issue
and the proposed new law, claiming that Asia Sentinel was "not an
accredited publication in Singapore," although the author is
fully-accredited as a foreign correspondent by the government.
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