Causes and Effects of Illegal Loan Sharks

Topics: Debt, Usury, Mortgage loan Pages: 3 (963 words) Published: October 7, 2012
llegal moneylender is the party offering illegal loans by charging higher interest rates. Doubled profits allow their business to continue operating despite the global economic recession. Oriented services such as shark's need to combat. Illegal moneylender promote their services with attractive offers such as instant and convenient loan without collateral while legitimate financial companies impose strict conditions and take a long time to approve the loan. In Indian society, illegal moneylender known as Chettiar, and was called the "Tai Ee Long" in Chinese and "loan sharks" in the Malay community. Statistics show that the number of illegal borrow from loan sharks is increasing from time to time. Because of these activities brought many disadvantages, the cause of this phenomenon must be identified and effective measures should be taken to overcome them.

There are several causes that make illegal moneylender services received. Among them is as easy approved loans illegal loan sharks. This is because borrowing money from the bank require complicated procedures and strict conditions. Someone who borrow from illegal loan sharks will get loan approval within a few hours compared with a bank that requires a long time to consider the eligibility of the borrower. Illegal moneylender also mendediakan loans to anyone regardless of whether the money can be borrowed, from RM1000 to hundreds of thousands of dollars. They also know how to win borrowers and allow lenders to require collateral. More and more loan money from illegal loan sharks will only increase KADA interest on the borrower. Rising interest rates cause borrowers everyday mampumemulangkan not borrowed money and eventually there will be a further tragedy case.

The next factor is the urgent need of money or suffered by the borrower to make a living for not having a salaried job. This is due to the borrower is experiencing problems or obstacles when working. In addition, borrowers may also poorly educated...
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