Took a cab to work today because I woke up late today due to my insomnia last night. While in the cab, the driver was listening to a Chinese radio channel and the DJ is discussing with call-in listeners about loan-sharks.

What’s interesting about the discussion is that some people from the legal profession actually suggested legalizing the loan-sharks trade so that there will be some form of control over loan-shark activities. When I heard it, I was surprised that there’s people giving suggestion in legalizing loan-sharks when in the first place are known for their high interest unsecured loans and hard tactic employed in getting back the amount loaned and high interest rate.

This topic came about because recently in Singapore, some households were harassed by loan-sharks. And these households are not the one that borrow monies from the loan-sharks, these households were targeted because their neighbor failed to make their payment to the loan-sharks, thus the loan-sharks harass these households into pressuring their neighbor to make the payment to the loan-sharks.

Due to this issue the Singapore’s Ministry of Home Affairs is considering making it an offence to borrow from loan-sharks.

But with the current bad economy situation and expected high unemployment rate, the unemployed will most likely turn to loan-sharks (besides pawning their valuables) to get some cash to tide them over these difficult period. Because no financial institutions or banks will give out unsecured loan to an unemployed unless they have some highly valuable items to put up for mortgage (e.g. properties).

And if the Singapore’s Ministry of Home Affairs is to make it into law that borrowing from loan-sharks is a penal code offence, that might just create another issue as the loan-sharks will make use of the loophole to threaten the borrower should he/she report to the authority he/she will also be committing an offence by borrowing from a loan-shark. Thus, the loan-shark might make use of the loaner who is unable to repay his debt to assist in illegal activities (e.g. being runner for the loan-shark, vice, robbery, etc).

If you are reading this blog post, do you think the loan-shark trade should be legalized in Singapore?

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