Despite exorbitant interest rates and the inevitable risks, people in Vietnam continue to choose to make deals with loan sharks.
The usurers charge their borrowers interest dozens of times higher than the limit set by the State Bank of Vietnam.
Despite this, people in need of quick cash continue to procure loans from them, putting themselves at risk of incurring heavy debts as well as other repercussions.
D.T.B.T., a resident of Hoc Mon District, Ho Chi Minh City, remembered her father borrowing a total of VND90 million (US$3,960) from local usurers to gamble with.
T.’s father mortgaged the family house in early 2016 before leaving his family.
By the end of that year, his lenders had demanded that T. and her mother hand over their house or pay VND250 million ($11,000), which was the combined total of the original loan and accumulated interest based on their deal with T.’s father.
T. is a worker while her mother sells goods at a local market, and they were unable to pay such a large debt.
By December last year, the lenders had taken away the main gate of their home, sprayed paint on its walls, and caused other damage as a way of ‘punishing’ T.’s family.
Concerned for her own and her mother’s safety, T. had no choice but to borrow money from other sources to pay her father’s debt.
Several loan sharks in Ho Chi Minh City even demand that interest is paid daily rather than monthly.
For every VND1 million ($44) loaned, borrowers are expected to pay some VND5,000 ($0.22) in interest every day.
Borrowing larger amounts of money requires a close relationship with these lenders for better credibility.
In early 2017, Nguyen Minh Huy, a resident of Binh Tan District, asked a friend to help him borrow some VND500 million ($22,000) at a monthly rate of four percent to fund his business.
After one month, the usurer raised the rate to five percent, claiming that they were running out of cash.
Huy had no other choice than to accept the new deal as he needed the capital.
“Despite the outrageous rate, not everyone can borrow from them, you need someone with high credibility to represent you,” Huy said.
Residing in a small alley in Vinh Cuu District of Dong Nai province, Tu recalled the suicide of her son about a year ago.
The elderly woman does still not know the exact reason her son hanging himself.
According to the elderly woman, her late son was a worker at a local company, who often borrowed sums of around VND1 million from lenders whenever he ran out of money.
As he had to pay monthly interest of around VND200,000 ($8.8) for each million dong, he quickly became indebted, Tu recounted, adding that she had once had to sell a piece of land to support him.
The man also had his arm broken on one occasion, which he claimed to have been caused in a sporting accident, Tu continued.
She only discovered that the injury had been inflicted on him by thugs who attacked her son, after his colleagues told her the truth at his funeral.
Other debtors choose to leave town when they are unable to pay up.
P.T.L., 66, also in Vinh Cuu District, said that her son ran away earlier this year, leaving his mother, his wife, and a five-year-old son with a debt of VND200 million ($8,800).
The lenders have since been throwing rocks at the door and windows of L.’s house, demanding that she pay the money, and have even threatened to kill her son once they found him, the woman said.
In another commune in Vinh Cuu, Tran Yen was in debt to the tune of VND5 million ($220) to a local loan shark.
As she was unable to pay the interest due to her unsuccessful business, eight thugs were sent to her house to threaten her entire family.
Yen’s son, Huynh Khac Vu, attacked the gang with a machete, causing serious injury to one of the thugs.
Vu is now being charged for attempted assault.