Wiping out loan sharks by
wiping out loan shark debts?
A proposed Thai government programme
By Jon Fernquest 
Last
week the Bangkok Post ran an editorial on a new government proposal to settle the debts of
the poor and wipe out
the problem of loan
sharks in Thailand, quite an ambitious project.wipe out - destroy,
eliminate, make no longer exist
loan sharks - people who offer loans at high interest rates often backed by violence or blackmail (See Wikipedia)
settle debts - pay back money owed to others
ambitious - a goal that is hard to achieve
loan sharks - people who offer loans at high interest rates often backed by violence or blackmail (See Wikipedia)
settle debts - pay back money owed to others
ambitious - a goal that is hard to achieve
Here is the article:
(Photo on right is of what one would imagine a mafia loan shark might look like in the US)
EDITORIAL
Helping poor settle debts
17/09/2009The Finance Ministry's directive to the Government Savings Bank and the Bank of Agriculture and Agricultural Cooperatives that they tackle the protracted underground or illegal debt problem of the poor, is indeed welcome news - even if this is yet another populist initiative of the Democrat Party.
Of course, whether this attempt by the government to help the poor bears fruit, remains to be seen.
directive – an
official order คำสั่ง
Finance Ministry directive -
protracted - lasting for a long time
a protracted problem - a problem that has existed for a long time
populist – politics that claims to represent the opinions and wishes of ordinary people with programmes that benefit ordinary people ประชานิยม
initiative – a new programme to solve a problem ความคิดริเริ่ม
populist initiative - a new programme to solve the problems of ordinary people
bears fruit - has results that benefit people
remains to be seen - we don't know what will happen yet, we will see in the future
Finance Ministry directive -
protracted - lasting for a long time
a protracted problem - a problem that has existed for a long time
populist – politics that claims to represent the opinions and wishes of ordinary people with programmes that benefit ordinary people ประชานิยม
initiative – a new programme to solve a problem ความคิดริเริ่ม
populist initiative - a new programme to solve the problems of ordinary people
bears fruit - has results that benefit people
remains to be seen - we don't know what will happen yet, we will see in the future
Of late there have been increasing news reports of debtors being badly beaten up by thugs after they failed to pay on time.
Some desperate debtors even committed suicide because they could not stand the pressure of repayment deadlines imposed by loan sharks or their intimidation tactics.
The example of a debtor taking out 10,000 baht from a loan shark and ending up servicing only the 20% monthly interest for years, with the principal still standing, is a common one among those who have fallen victim to the vicious cycle of underground debt.
a thug - a violent
criminal
desperate - willing to try anything to get out of a bad situation
desperate debtors - people who cannot pay back money theyr borrowed (who are willing to do anything to get the money to pay back money)
a deadline for Y - the date or time when Y must be finished by (See glossary)
repayment deadlines - the date that a loan must be repaid by
intimidation - frightening people to get what you want
intimidation tactics - using imtimidation as a way to get what you want
could not stand the pressure of repayment deadlines imposed by loan sharks
principle, the principle of a loan - the money you borrowed in a loan
servicing, servicing a loan - paying the interest on the principle but principle still remains to pay back
principal still standing - the amount of the original loan that has not been paid back yet
a vicious cycle, vicious circle (noun)- when one problem leads to another problem that makes the first problem even worse making the problem bigger (amplifying the problem), this repeats over and over again in a cycle until the situation gets extremely bad; a series of events that reinforces itself through a feedback loop toward greater instability (See Wikipedia)
a vicious cycle of underground debt - borrowing from loan sharks difficult to pay back so must borrow even more to pay back what you borrowed
desperate - willing to try anything to get out of a bad situation
desperate debtors - people who cannot pay back money theyr borrowed (who are willing to do anything to get the money to pay back money)
a deadline for Y - the date or time when Y must be finished by (See glossary)
repayment deadlines - the date that a loan must be repaid by
intimidation - frightening people to get what you want
intimidation tactics - using imtimidation as a way to get what you want
could not stand the pressure of repayment deadlines imposed by loan sharks
principle, the principle of a loan - the money you borrowed in a loan
servicing, servicing a loan - paying the interest on the principle but principle still remains to pay back
principal still standing - the amount of the original loan that has not been paid back yet
a vicious cycle, vicious circle (noun)- when one problem leads to another problem that makes the first problem even worse making the problem bigger (amplifying the problem), this repeats over and over again in a cycle until the situation gets extremely bad; a series of events that reinforces itself through a feedback loop toward greater instability (See Wikipedia)
a vicious cycle of underground debt - borrowing from loan sharks difficult to pay back so must borrow even more to pay back what you borrowed
The debt problem has been identified as the most pressing issue faced by low-income earners in various occupations, and these debtors include government officials and state enterprise employees, according to a survey conducted in June by the Suan Dusit Poll.
About 47% of the farmers polled admitted that their most worrisome problem was their debts to the BAAC and to loan sharks.
a pressing issue - an
urgent issue, an issue that must be dealt with and solved quickly
a state enterprise - a company owned and run by the government
Suan Dusit Poll - a popular public opinion poll carried out by Suan Dusit university in Bangkok
worrisome - causing worry
the most worrisome problem - the problem that caused the most worry
a state enterprise - a company owned and run by the government
Suan Dusit Poll - a popular public opinion poll carried out by Suan Dusit university in Bangkok
worrisome - causing worry
the most worrisome problem - the problem that caused the most worry
Use Thaksin's lists of poor people
For the two state-owned banks to start preparing lists of those in need of a refinancing arrangement would be too time-consuming. To expedite the process and make matters less complicated, the banks could simply update the previous lists of poor people prepared by the Interior Ministry during the Thaksin government.It will be remembered that in 2004 the Thaksin regime attempted to solve the underground debt problem of people in the low-income bracket.
At the time, the Interior Ministry's debt settlement centre reported back to the Thaksin cabinet that it had brought together debtors and creditors for talks and managed to settle 97% of the debts owed by 1.6 million people, with total debt amounting to 108 billion baht. That was indeed a remarkable achievement.
Given the results of the recent Suan Dusit Poll, which show that the problem of debt remains the most pressing worry for people in various occupations and professions, two assumptions may be drawn: 1) the claim by the Thaksin administration was exaggerated; and 2) new debts have been incurred.
refinancing arrangement - getting
a new loan to replace an old loan
time-consuming - uses a lot of time
expedite the process - help make the process go faster
process – a series of actions that you take in order to achieve a result แนวทางปฏิบัติ, กระบวน, วิธีการ
update the lists - add new names to a list so that it is current
in the low-income bracket - the poorest people in society
debt settlement - making arrangement with the lender to pay back some amount (usually less) and end the debt
indeed a remarkable achievement - a surprising and great achievement
Suan Dusit Poll - an important opinion poll in Thailand at Suan Dusit University in Bangkok (See website)
opinion poll - when a sample of the population is asked a series of questions to determine public opinion on issues (See Wikipedia)
the most pressing worry - the most urgent thing worried about
urgent - needs to be done quickly (or problem solved quickly)
exaggerated - saying more than is actually true
claim - saying something is true without proving it yet
incur debts - borrow money (that must be paid back)
time-consuming - uses a lot of time
expedite the process - help make the process go faster
process – a series of actions that you take in order to achieve a result แนวทางปฏิบัติ, กระบวน, วิธีการ
update the lists - add new names to a list so that it is current
in the low-income bracket - the poorest people in society
debt settlement - making arrangement with the lender to pay back some amount (usually less) and end the debt
indeed a remarkable achievement - a surprising and great achievement
Suan Dusit Poll - an important opinion poll in Thailand at Suan Dusit University in Bangkok (See website)
opinion poll - when a sample of the population is asked a series of questions to determine public opinion on issues (See Wikipedia)
the most pressing worry - the most urgent thing worried about
urgent - needs to be done quickly (or problem solved quickly)
exaggerated - saying more than is actually true
claim - saying something is true without proving it yet
incur debts - borrow money (that must be paid back)
One of the first challenges for the banks is how to convince lenders of these underground debts to come to the negotiating table and agree to a compromise settlement that would be fair to the debtors and acceptable to the banks.
Since many of these creditors are known to be mafia figures with ruthless thugs in their employ, or are police officers who double as unscrupulousloan sharks, it is doubtful whether bank officials will be able to carry out the job effectively.
In this matter, the involvement of officials from other agencies such as the Anti-Money Laundering Office, could be helpful and provide bank officials with some "teeth" to tackle the problem.
But the biggest challenge will be how to prevent these "rescued" debtors from again falling into the trap of underground debt. Which means the government may have to explore ways and means that would allow low-income earners a less complicated and less expensive access to new funding.
come
to the negotiating table - be ready to negotiate and
compromise
compromise - when to reach an agreement people give up things they want to make the other side happy
compromise settlement - an changed agreement to make all sides happy
acceptable to the banks - banks agree, think it is ok
creditors - lenders who have not been paid back yet
mafia figures - criminals who belong to a gang like the mafia
ruthless - to get what they want will do cruel things to people
ruthless thugs in their employ - ruthless thugs who work for them (are their employees)
unscrupulous - willing to do anything to get what they want
carry out the job effectively - get the job done as planned, finish the job successfully
money laundering - disguising illegally obtained funds so that they seem legal (See Wikipedia)
anti-money laundering - legal controls that require financial institutions to prevent or report money laundering activities (See Wikipedia)
Anti-Money Laundering Office (AMRO) - the Thai government office that investigates people for the crime of money laundering
to tackle the problem - to solve the problem
with some "teeth" to tackle the problem - with tools to solve the problem (threats or punishment)
access to new funding - get money to do a project
compromise - when to reach an agreement people give up things they want to make the other side happy
compromise settlement - an changed agreement to make all sides happy
acceptable to the banks - banks agree, think it is ok
creditors - lenders who have not been paid back yet
mafia figures - criminals who belong to a gang like the mafia
ruthless - to get what they want will do cruel things to people
ruthless thugs in their employ - ruthless thugs who work for them (are their employees)
unscrupulous - willing to do anything to get what they want
carry out the job effectively - get the job done as planned, finish the job successfully
money laundering - disguising illegally obtained funds so that they seem legal (See Wikipedia)
anti-money laundering - legal controls that require financial institutions to prevent or report money laundering activities (See Wikipedia)
Anti-Money Laundering Office (AMRO) - the Thai government office that investigates people for the crime of money laundering
to tackle the problem - to solve the problem
with some "teeth" to tackle the problem - with tools to solve the problem (threats or punishment)
access to new funding - get money to do a project
(Source: Bangkok Post, EDITORIAL, Helping poor settle debts, 17/09/2009, link)
