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Loan shark cases up sharply
"THE number of loan shark cases rose 58 per cent last year as Singaporeans reeling from the economic crisis turned to loan sharks to tide them over the tough times, a senior police official said on Monday.
There were about 18,600 cases of illegal loans made by loan sharks last year, a 58 per cent increase from about 11,800 cases in 2008, said Mr Ng Boon Gay, director with the Criminal Investigation Department.
Illegal moneylenders lend at exorbitant interest rates and use threats and intimidation to pressure debtors to pay up if they renege on payments. 'We expect loan shark cases to continue to be a concern. We'll try to take it down, but we'll see how it will turn out,' said Mr Ng. 'We are watching it very carefully.'
Mr Ng said the police arrested 958 illegal moneylenders last year, a 90 per cent jump from 2008 as the economic slump pushed cash-strapped locals to turn to loan sharks.
Singapore's economy shrank 2.1 per cent last year after slipping into a severe recession in the third quarter of 2008 due to the impact of the global economic crisis.
Although Singapore has pulled out of the slump, the loan shark situation is not expected to improve as 'the percentage of bad debt has actually increased' following the crisis, Mr Ng said. 'Even though there is some upturn in the economy, based on the data that we get... we expect it to increase,' he said. -- AFP"
In my opinion, the reason for this circumstance happening cannot be simply attributed to the economic crisis. Illegal moneylender appears at any time, not only just in this session. To prevent this circumstance become worse, there are some measures that government can take. Firstly, as Mr Ng said, the government should keep concern on it and put more pressure on these moneylenders. For example, the police pay more attention to investigate these illegal actions and once they catch some moneylenders, they should be put on the newspapers with how they are punished to show the consequences. Besides punishing these lenders, government should consider why this happens. To solve the problem that people borrow money illegally, government may authorize some banks such as POSB or OCBC to lend money to the ones who need it urgently. At the same time, banks should easy the procedure for people to borrow money. In this way, I think that the number of illegal moneylender would decrease. --By Ryan.
I agree with Ryan’s opinion that shark loans have always been around, not only during economic recessions. I support his proposing method to decrease the number of illegal moneylenders by means of media. However, from my point of view, I do not think shark loans are as simple as it seems, or it will not be a universal problem bothering many countries. To simplify the process of bank loan is a good idea, but it may not be totally practical. Only if one has the credibility and ability to pay back the money, will he receive the bank loan. This is why bank loans are legal and credible. However, there will always be the cases where people do not have the ability to pay back but they need money urgently, then the bank usually can do nothing to help. In my opinion, the increase in shark loans is highly related to the economic crisis. To prevent it from getting worse, the most important goal that government should try to achieve is to bring the life of its people back to normal, as soon as possible, so as to pull as many people as possible from the situation where they have only the shark loans to turn to. The shark loans can never die out provided there will always be people living under standard.
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