Evil Indian Loan Sharks and Poor Filipino Barber Ruben

[Emma, LI Dongyi]

So one week before we left the country, our business owner Ruben finally explained why he has zero saving in hand when he’s running such a profitable business. That basically because he’s borrowing a huge amount of money from the loan shark “Bombay 5-6”.

Filipinos refer to people with South Asian descent or features, regardless of actual nationality or origin, as “Bombay.” Though I have no idea why people always think my work partner, who looks nothing but Indian, is Chinese. And the moneylenders are called “5-6” because for every 5 pesos they borrow, 6 pesos has to be returned.

Ruben’s loan also works this way: Ruben borrowed ₱100,000 from 5 Indians, ₱20,000 each. And the daily repayment to each of the five moneylenders is ₱400, during a period of 58 days. If you calculate that with a clear mind, you’ll soon notice the horrible interest rate here: Ruben is paying 20% interests in 2 months, which means 120% in a year.

	Indian 5-6 Moneylenders	BDO Personal Loan
Tenor (Months)	2	6, 12, 18, 24, 36
Effective Rate/Annum	120%	26.27%, 26.63%, 26.76%, 26.58%, 25.98%
Advantages	Instant cash; Nearly unlimited amount; Easy repayment.	Reasonable rate; No death threat.

The Indian moneylenders undertake a daily collection at the front door of Jagna Barber Shop at 5 am everyday. And I’m quite sure that if default happened, they would not hesitate to resort to any sort of violence. Ruben himself is very proud of the fact that he never delayed a single repayment. And as a popular customer with a thriving business and big volume of customers, a large purchase of their financial products and absolutely no default history, Ruben managed to have a very good relationship with the Indian sharks so that his loan can be extended by 58 days after 58 days for years.

President Rodrigo Duterte is fully aware of the terrible situation of domestic private financing market and the negative reputation of the Indian financiers in the country. In order to ease the big burden on his citizens in the Philippines, he said he’s going to adopt the toughest methods to dissuade Indians from engaging in this practice.

These Indian 5-6 moneylenders acquire wealth from small vendor owners or struggling households who are already down on their knees in poverty. I don’t know how they can sleep at night. But we have to face a fact that there are only two ways that the evil practice can be eliminated forever: either the president can offer a much better lending program that can match the popularity of “Bombay 5-6”, or the origins of its existence, poverty, is stumped.

And interestingly, the high interest rate in the “Bombay 5-6″ scheme is, technically speaking, not a crime at all. Because the Usury Law of the Philippines has been repealed.

God bless Ruben can get rid of his debt soon.