Seafood association urges crackdown on loan sharks

The Vietnam Association of Seafood Exporters and Producers has urged the Ministry of Public Security to bring loan sharks to justice as they are disrupting the operations of member firms.

In a petition sent to the ministry’s economic security agency, the association (VASEP) said many seafood company executives have been harassed, threatened and defamed by loan shark rings.

Many association members complained that loan shark rings have been harassing and defaming their leaders on phone and via other social media links including the messenger.

“This has had serious negative impact on the enterprises, their leaders' sentiments and social order,” VASEP's petition reads.

Over the past two years, loan shark activities have become |more pervasive across the country, especially in the Mekong Delta and areas near industrial parks, with workers having borrowed money during the pandemic to make ends meet.

The executives suspect that the employees have been tricked into borrowing from loan sharks on mobile apps.

When borrowers fail to repay their loans taken at cut-throat interest rates in time, loan sharks have been threatening them, their relatives, friends, and colleagues and even their employers with defamation, physical harm and disruption of business operations.

The rings have posted images of executives on social media and spread fake information about “illegal” acts and even their death.

Black market loans, mostly related to loan sharks, have been a chronic problem in Vietnam.

On July 13, Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu said that the banking sector was ready to disburse a loan package of VND20 trillion ($855 million) for workers at industrial parks at half the current interest rate in order to counter usurious informal and illegal credit.

In the last three years, the Ministry of Public Security has handled 2,740 cases of "black credit" with 5,000 suspects. Of these, 4,000 suspects in 2,000 cases were prosecuted. Factory workers were victims in 1,000 cases.

As of April, consumer loans in the country amounted to over VND2,260 trillion ($96.62 billion), accounting for over 20% of the economy's outstanding loans, up 8.93% against the end of 2021.

Surveys carried out by trade unions over a number of years have revealed that around a third of Vietnamese workers are destitute, have debts and borrowed from loan sharks using social insurance and identity cards as collateral.

Vu Minh Tien, director of the Institute of Workers and Trade Union, said at a June 16 seminar on minimum wages that out of 2,000 people polled in March, 12% borrow money on a regular basis to meet basic living expenses, 35.5% do so three to four times per month, and 34.8%, once or twice a year.

"I've never seen any worker who borrowed money to purchase real estate. They borrow just to cover their immediate living expenses," Tien said. "If a worker does not work overtime and his or her child is sick or their parents are hospitalized, they will certainly fail to pay rent in time in the following months, and eventually resort to (informal) loans."