Shark's in the carpark. Our shark.

If you don’t repay a bank loan, the bank will just ding your credit record. Singaporean loan sharks will torch your car.

The government doesn’t like to talk about it, but Singapore has a loan-sharking problem - a major loan-sharking problem. The banks generally won’t lend to anyone earning less than $30k, which is higher than Singapore’s median income (even GE Money and POSB require annual income of $20k), and there’s no such thing as payday lending. For the low-income population, then, there aren’t a lot of alternatives to the “unlicensed moneylenders” (if you’re the government) or the ah longs (if you’re not).

Their modus operandi is simple, and Ben Bland (you know he’s good ‘cause he’s banned in Singapore) explains it here:

[…] the terms are steep, normally a usurious 40-50 percent per month if the luckless borrowers can meet the agreed payments, i.e., if they borrow S$800, they pay back $1,200 after five weeks. They are the lucky ones. Defaulters are met by a demand that the borrower pay the full amount as a penalty charge. The annual rate can thus easily top 1,000 percent.

And if you can’t pay those 1000% interest rates, out come the runners and the thugs to graffiti your apartment, glue your door locks, and generally intimidate you into paying. (Their favourite graffiti tag is “O$P$”, shorthand for “owe money pay money”.)

The Singaporean government has lately been cracking down on loansharking (and its associated intimidation), jacking up the sentences for anyone caught harassing borrowers. So the loan sharks have stopped hiring Singaporean runners… and started hiring foreigners instead:

According to court documents, Wu, who was unemployed, was recruited in Kaohsiung, a city in south-west Taiwan, by a syndicate member known only as Xiao Su. He was told that his air ticket to Singapore and accommodation here would be paid for and that his job was to deface walls and lock debtors with outstanding loans inside their homes.

For this, he would be paid $3,600 a month. If arrested, he would receive $900 in compensation for every month he served in jail and an additional $3,600 if he was caned.

Incidentally, the median income in Singapore is somewhere around $2,400 - two-thirds of what the loan-sharks’ runners are being paid. Despite the government’s efforts, it seems loan-sharking is still a lucrative business.

(I have one question about that “loansharks will torch your car” article. Lexuses (Lexi?) start from $165,000 in Singapore. If someone’s rich enough to afford a Lexus, why the hell are they dealing with loan sharks?)