Kamal relating his story to Yang Berkhidmat Michael Tay.
TRAPPED: Loan sharks continue a borrower’s cycle of debt by getting their counterparts to make irresistible offers
JOHOR BARU: KAMAL (not his real name) borrowed RM400 from a loan shark two months ago. He claimed that he has since paid about RM5,000 in interest for the sum he borrowed.
Michael Tay, the newly-appointed Johor MCA bureau of coordinating government affairs chairman, said that loan sharks are now using a tactic where they will get their friends to conduct "follow-up sessions" with the borrower.
Tay said after Kamal had paid the first loan shark RM200 in interest for the sum he borrowed, he received a call from another loan shark who offered Kamal more money to run his business.
Kamal accepted the offer. After that he received calls from three other loan sharks who made Kamal the same offer.
Kamal took all their offers and could only pay the interest.
Tay said Kamal, a 28-year-old kuih seller, had borrowed the money to diversify his business as he wanted to sell shoes.
Kamal had wanted to settle the loan early but was told by one of the loan sharks that there was no need to rush.
"The loan sharks want the borrower to take his time, so that they can make money from the interest," said Tay.
"Kamal had also paid RM6,000 as down payment for a van for his business venture. Unfortunately, the deal went sour and Kamal ended up losing the down payment and the van."
Tay said he would help Kamal by talking to the loan sharks, but advised victims like Kamal to be wary of turning to loan sharks for help.
"It is always wise to live within your means. So many people come to me telling me that they are being hounded by loan sharks.
"I can only help by acting as a mediator between both parties," he said.
Tay also urged the public not to listen to advice from their "friends" who may be earning an interest from the loan sharks.
"Take Kamal for instance, he was advised to get help from a loan shark when his business slowed down.
"I'm not saying the friend is getting a commission, but it is a well-known fact that an Ah Long pays between five and 10 per cent to anyone who introduces a client to them," Tay said.
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