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26-08-2013, 11:30 AM
An honorable member of the Coffee Shop Has Just Posted the Following:
Not a day goes by that I can walk through my neighboring flats without seeing loan shark vandalism the usual O$P$ notices. After clampdown, arrests and vigilance, the problem goes away for a while then comes back but never disappears. Once in a while will hear of people committing suicide due to loan shark harassment. Why is this problem always there? It is a highly lucrative business and there is always demand from desperate people.
So what is the problem with loan sharking - after all it is willing buyer-willing seller arrangement? They charge high interest, lend to people have a high chance of default, then use strong arm tactics to recover their money + interest....the end result is misery and pain for many Singaporean families.
The other day I was shopping in Orchard and one young man step up to me. He told me I can get "$80 free" if I sign up for a credit card. I explain to him I'm jobless, he immediately lost interest in me. But the question lingers how come the credit card company can "give" so much money and still make money.
Over the weekend I met with my friend who just quit his job in consumer banking department of a major bank 2 months ago. He had been there for 8 years and was doing applications evaluation. Because of long hours, he was burn out and quitting to take a break but he said his next job won't be banking anymore "he had enough". Since both of us were very free we chatted for hours...and he told me many interesting things about consumer banking that I was not aware of.
I just start with this statistics from MAS on rollover credit card debt:
S$ MILLION
PERIOD ROLLOVER BALANCE *
2007 2,979.4
2008 3,378.8
2009 3,702.1
2010 4,014.7
2011 4,537.9
2012 4,991.8
These are the unpaid credit card bills that rollover to the next month. These are charged at 2% a month and at the present size the banks make $1.2B on interest. This is only half the story. The banks also lend an enormous amount of money that is non-housing and non-car loans classified as others:
debt_banks.JPG (http://www.sammyboy.com/attachment.php?attachmentid=11891&d=1377487224)
The goal of the banks are to recruit as many Singaporeans to borrow unsecured and credit card debts because this is where they can earn the highest amounts. So my friend told me banks aim:
1. Enroll as many people into spending on credit cards and borrow unsecured debts by initially offering goodies like low interest rates to entice them.
2. Once people are trapped like rats and boxed in. Some of them will fall into hardship like pay cuts or retrenchment. ..never fully able to pay down their debts.
3. Once these people are trapped they become the banks best customers because they are in permanent debt and banks can keep extracting interest earnings from them month after month like a slave.
4. The banks are trying to enlarge this group of slave debtors so that they have recurring income and revenue from this group of Singaporeans - the banks can sit and collect billions in easy money.
5. When the person is complete run dry, the bank still does not lose money because they can get it from his estate i.e. sale of HDB flats.
6. The bankruptcy laws in Singapore favors the bank and shape their predatory behavior and Singaporeans are being entrapped because they cannot exit until they are bled dry.
Watch the banks grow this kind of debt aggressively. You see them at every shopping center pushing, every exhibition, pushing and pushing basically many people are blind and blur to the grand strategy of these banks. MAS is perhaps the most useless regulator around and really let the banks exploit the people as much as they can. And the Singapore bankruptcy laws are helping to entrap vulnerable Singaporeans.
Attached Images
http://www.sammyboy.com/images/attach/jpg.gif debt_banks.JPG (http://www.sammyboy.com/attachment.php?attachmentid=11891&d=1377487224) (41.3 KB)
Click here to view the whole thread at www.sammyboy.com (http://www.singsupplies.com/showthread.php?161067-Project-Singa-Squeeze-what-banks-are-trying-do-to-Singaporeans&goto=newpost).
Not a day goes by that I can walk through my neighboring flats without seeing loan shark vandalism the usual O$P$ notices. After clampdown, arrests and vigilance, the problem goes away for a while then comes back but never disappears. Once in a while will hear of people committing suicide due to loan shark harassment. Why is this problem always there? It is a highly lucrative business and there is always demand from desperate people.
So what is the problem with loan sharking - after all it is willing buyer-willing seller arrangement? They charge high interest, lend to people have a high chance of default, then use strong arm tactics to recover their money + interest....the end result is misery and pain for many Singaporean families.
The other day I was shopping in Orchard and one young man step up to me. He told me I can get "$80 free" if I sign up for a credit card. I explain to him I'm jobless, he immediately lost interest in me. But the question lingers how come the credit card company can "give" so much money and still make money.
Over the weekend I met with my friend who just quit his job in consumer banking department of a major bank 2 months ago. He had been there for 8 years and was doing applications evaluation. Because of long hours, he was burn out and quitting to take a break but he said his next job won't be banking anymore "he had enough". Since both of us were very free we chatted for hours...and he told me many interesting things about consumer banking that I was not aware of.
I just start with this statistics from MAS on rollover credit card debt:
S$ MILLION
PERIOD ROLLOVER BALANCE *
2007 2,979.4
2008 3,378.8
2009 3,702.1
2010 4,014.7
2011 4,537.9
2012 4,991.8
These are the unpaid credit card bills that rollover to the next month. These are charged at 2% a month and at the present size the banks make $1.2B on interest. This is only half the story. The banks also lend an enormous amount of money that is non-housing and non-car loans classified as others:
debt_banks.JPG (http://www.sammyboy.com/attachment.php?attachmentid=11891&d=1377487224)
The goal of the banks are to recruit as many Singaporeans to borrow unsecured and credit card debts because this is where they can earn the highest amounts. So my friend told me banks aim:
1. Enroll as many people into spending on credit cards and borrow unsecured debts by initially offering goodies like low interest rates to entice them.
2. Once people are trapped like rats and boxed in. Some of them will fall into hardship like pay cuts or retrenchment. ..never fully able to pay down their debts.
3. Once these people are trapped they become the banks best customers because they are in permanent debt and banks can keep extracting interest earnings from them month after month like a slave.
4. The banks are trying to enlarge this group of slave debtors so that they have recurring income and revenue from this group of Singaporeans - the banks can sit and collect billions in easy money.
5. When the person is complete run dry, the bank still does not lose money because they can get it from his estate i.e. sale of HDB flats.
6. The bankruptcy laws in Singapore favors the bank and shape their predatory behavior and Singaporeans are being entrapped because they cannot exit until they are bled dry.
Watch the banks grow this kind of debt aggressively. You see them at every shopping center pushing, every exhibition, pushing and pushing basically many people are blind and blur to the grand strategy of these banks. MAS is perhaps the most useless regulator around and really let the banks exploit the people as much as they can. And the Singapore bankruptcy laws are helping to entrap vulnerable Singaporeans.
Attached Images
http://www.sammyboy.com/images/attach/jpg.gif debt_banks.JPG (http://www.sammyboy.com/attachment.php?attachmentid=11891&d=1377487224) (41.3 KB)
Click here to view the whole thread at www.sammyboy.com (http://www.singsupplies.com/showthread.php?161067-Project-Singa-Squeeze-what-banks-are-trying-do-to-Singaporeans&goto=newpost).