Number of borrowers from loan sharks increased by 30 per cent in festive season
SHAH ALAM - Some people are willing to borrow from unlicensed money lenders such as loan sharks or 'alongs' in order to cover their festive season costs.
Klang MCA Public Complaints Bureau Datuk Tan Bok Koon said the number of borrowers who took loans from alongs had increased by 30 per cent throughout the Eid festive season in April.
He said borrowers that were tracked down claimed there were several complications with debt, financial issues due to being laid off and wanting to celebrate lavishly without realising the risks.
“Individuals involved borrowed only RM1,000 to RM2,000 however the high interest rate forces them to pay twice the amount.
“The total borrowed was not much, but it could increase further with its high interest rate making some complainants having further complications in paying their debt that is increasing several folds.
“They would usually borrow to make their raya preparations by buying their children’s clothes and sending their family back home,” he told Sinar recently.
He said other factors that cause the loans were due to debt or payments for other loans.
He said they claimed to have a high debt whether it involved a car loan as well as business issues.
“The victims claimed there were difficulties in gaining loans from banks as they were blacklisted after failing to perform their previous repayment,” he said.
He xplained most borrowers admit they had borrowed from alongs as they were attracted by the various offers and convenience.
“Alongs would provide what was asked for without the need for important documents or financial checks as what’s done in legitimate financial institutions.
“However, the high interest rate must be kept in mind. Many cases reported had borrowers with debt exceeding the loan rates,” he said.
Tan said the festive season being the reason some individuals were forced to borrow should not happen.
“Some borrowers when they suffer the high interest rate they would ask for our help and what they would inform was the loan being made for the festive celebrations.
“This issue should be avoided, I understand in the context of festivities everyone wants the best for the family, but what’s important is not to risk yourselves with loans from alongs,” he said.
He said there are some situations where borrowers wanted to celebrate with a new car, expensive equipment with money from along loans.
“It must be reminded that the borrower is not the only one at risk, but the whole family is involved after making the loan from alongs,” he said.
Tan explained many were influenced by the along offers after seeing their advertisements plastered on streetlights, signboards and vacant business premises.
He said enforcement to take down such advertisements must be increased.
“I admit the efforts by responsible parties in the operations to take down these illegal advertisements were done, but it must be improved.
“We don’t want alongs to become accessible for the public through these illegal advertisements,” he said.
He explained there are several victims who refused to lodge a police report after being threatened by alongs.
Zamil (refusing to reveal his real name) had previously lived a comfortable life with his RM4,000 salary, but he was left jobless in early Ramadhan.
Zamil told Sinar that he wanted to make a loan with a legal financial institution, but it had failed after he had been fired and having other commitments.
He decided to take a RM10,000 loan from along.
“I saw an along advertisement while heading to the store where they had a number placed on a streetlight in the area.
“Without taking much time I made the loan thinking I wanted to celebrate raya and purchase equipment especially since I lacked a job,” he said.
He had several other commitments such as house insurance and a car.
The father of three said the risk of borrowing from alongs was ignored until he told his friend regarding the matter.
“My friend was shocked when I said I borrowed from along, I explained by situation I was experiencing leading to why I took such actions.
“He made me realise my actions were incorrect as it puts myself and my family at risk,” he said.
He added his wife and children’s face immediately appeared on his mind when thinking about the short-term actions he took.
“I didn’t want to tell my wife I took a loan from alongs, I didn’t want her to worry, I only thought about the raya preparations and the loans I needed to settle.
“I regret it and it should not be so, but everything has happened and I must find a solution to this along issue,” he said.
