There are many legal money lender in Jurong East as well as the rest of Singapore. However, many lenders still fall prey to illegal lenders or ah longs.
Ah longs are not registered with the Ministry of Law (MinLaw), so they are not exactly complying with the rules for lenders. Most people are aware of this, but why do these predatory lenders still exist? Here are five reasons.
Aggressive marketing
Even if they’re illegal, ah longs can still be quite pushy with their marketing strategies. They often use social media ads and instant messaging groups to gain unsuspecting clients.
They advertise to all people to maximise their chances of getting clients. With that, even if you only take out loans through legitimate lenders, you can still occasionally see ads and posts on your social media feeds from ah longs.
High demand for quick loans
Many Singaporeans are actually looking for loans that are quick and easy to apply for. With that, some are led to ah longs. Their promises of quick approvals and large amounts that can be borrowed are quite attractive to some people.
Often, those who are desperate for cash are the ones who are duped. Ah longs take advantage of the urgency of needs of people in tight financial situations. As long as they can find people to victimize, these illegal lenders will continue doing business.
Scams and blackmail
Many ah longs make use of unethical practices when dealing with their clients. If you get locked in to a loan with an ah long, they might constantly use threats to get you to pay up. There may even be hidden fees that would only surface later on, and if you refuse to pay those fees, you get blackmailed.
For some ah longs, even giving out your personal information is already dangerous. They can threaten to expose your information or sell it to the black market if you decide not to take out a loan from them.
Most people who use ah longs are afraid for their safety and privacy. For that reason, they often do not report predatory lenders to the proper authorities.
Strict regulations for legitimate lenders
Legal moneylenders must comply with the rules set by the Ministry of Law (MinLaw) and the Monetary Authority of Singapore (MAS). There are also rules for borrowers, such as income requirements and maximum loan amounts.
Because of the strict rules for borrowers, some people do not qualify for legally-issued loans. They then turn to ah longs instead. These people only think about getting money quickly; they often put aside the consequences of using illegal money lenders.
Lack of financial education
Most people who fall victim to ah longs lack financial literacy. They may not know how to distinguish good loans from bad ones. They may also lack the knowledge of what legitimate money lenders look like and how they operate. Most importantly, they may not be fully aware of the basics of managing money, which makes them prone to predatory lending.
Ah longs would often target these kinds of individuals. If you are financially educated, you would know to steer clear of these loan sharks no matter the circumstances.
Conclusion
Ah longs or illegal lenders still exist because, somehow, there is still demand for their ‘services’. Also, some borrowers resort to these lenders out of desperation, a lack of financial literacy, or both. Additionally, some of them may not qualify for loans from legitimate lenders.
But if you have the right financial education and are disciplined with your money, you will not have to resort to these loan sharks. Be financially informed and build good money habits.
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