UAE | General

Loan sharks preying on cash-strapped UAE residents

Most victims are from Indian subcontinent and Philippines and they risk violence, report says

  • By Faisal Masudi, Staff Reporter and Cleofe Maceda, Senior Reporter
  • Published: 21:57 March 17, 2013
  • Gulf News

  • Image Credit: Javed Nawab/Gulf News

Dubai: Loan sharks continue to victimise cash-strapped UAE residents despite strict laws against the practice, a new report has said.

Borrowers are mostly from the Indian subcontinent and Philippines.

“The UAE loan shark community has a macabre nickname: the blade mafia. This refers to both the cut-throat rates of interest and the actual use of a blade as a tool of loan recovery,” according to a report in the 999, a monthly magazine of the Ministry of Interior. The report titled: “Swimming with the Sharks,” includes cases of violence and suicide allegedly linked to the “blade mafia.”

Gulf News has reported earlier, a debt-laden Indian family of three was found hanged to death at their Ras Al Khaimah residence. It was believed the wife and daughter’s passports were held by moneylenders, the article adds. ‘Loan sharks’ routinely seize borrowers’ passport until repayment, said the report.

In another case, a Bangladeshi expat was allegedly kidnapped and assaulted by three compatriots after his Dh500 debt rocketed to Dh6,000 with interest, it added.

In a statement, 999 Editor-in-Chief Lt Col Awadh Al Kindi told Gulf News more residents are falling into the trap.

“The number of loan shark victims is growing at an alarming rate — with tens of millions of dirhams in circulation — because of a number of reasons,” he said.

“First, the number of population in general, and the expat community, in particular, is increasing.

“Second, UAE authorities have been tougher in eradicating these insidious practices so more and more cases have been exposed.

“Third, the financial needs of the families of these borrowers back home have also been increasing so quite a number of individuals have been falling into this so called-loan shark trap.”

He added that UAE authorities have been “relentless” in raising awareness on the loan-shark threat, with plans for greater punishments.

“The penalties are on a case-to-case basis but terms include years behind bars and tens of thousand of dirhams as fines.

“And of course, the UAE authorities are continuously encouraging the victims to come out of the open and seek proper help from the UAE authorities,” he said in the statement.

“We urge every one to stay away from these loan sharks and where possible, inform the authorities about these individuals and groups so we can stop their insidious practices.

“We encourage all loan shark victims to approach any police station in the UAE.”

Steve Gregory, managing partner at Holborn Assets, said most people who are drawn to illegal moneylending are the “weakest members of society who most likely do not have bank accounts and who require emergency funds for family back home rather than personal needs.”

“Anyone looking to borrow this way would be better advised to ask the employer for help, wherever possible. Loan sharks employ criminal methods to lend money, and criminal activities to get recovery of it also. Please avoid them,” Gregory advised borrowers.

Comments (8)

  1. Added 17:18 March 18, 2013

    yes , these blade mafia is very dangerous ,I am also one of the victim.

    aman, rak, United Arab Emirates

  2. Added 14:22 March 18, 2013

    I think banks should be more reliable for loans. now if any one wants to take loan from bank their salary should be Dh8,000 or higher. Or from any private financial company salary should be more than Dh4,000. There are many people who get less then Dh4,000. Banks should help them, loan amount can be lower. Instead of large amounts they can give Dh5,000 to Dh50,000 at least to lower salary holders. micro financial support can change people's lives.

    Rajini, dubai, United Arab Emirates

  3. Added 14:16 March 18, 2013

    Is is unfortunate that many are financial illiterates. The work stress is always higher when you are employed overseas because most of the time the residency visas of spouses, children are linked to self. Any small incident at work can send triggers about uncertain future employment further magnified by the thoughts of spouse, children, education, etc. Loan amount is just like 'another sack' on already burdened shoulders. People should start saving money and avoid loans for a healthy life.

    Rohan, DUBAI, United Arab Emirates

  4. Added 14:10 March 18, 2013

    Money lenders are not the only ones to blame. People often borrow money with the intention of never returning it. If the money lenders are holding back passports, it is because of security. How else would they be able to recover their money in the event of default? Moreover, they are helping borrowers in times of need.

    Lester, Dubai, United Arab Emirates

  5. Added 13:45 March 18, 2013

    Some companies are in trouble and also taking advantage of employees to spend from their pocket for the company expenses and other also back home commitment. This leads to go for loans. People should not go for luxury life, they should learn to live on policy of " Extend the legs up to bed not beyond that" But people need luxury life though can't afford for that.

    asokan, dubai, United Arab Emirates

  6. Added 11:49 March 18, 2013

    I think banks should be more reliable for loans. now if any one wants to take loan from bank their salary should be Dh8,000 or higher. Or from any private financial company salary should be more than Dh4,000. There are many people who get less then Dh4,000. Banks should help them, loan amount can be lower. Instead of large amounts they can give Dh5,000 to Dh50,000 at least to lower salary holders. micro financial support can change people's lives.

    Mozammal Hossan, Dubai, United Arab Emirates

  7. Added 09:37 March 18, 2013

    Unfortuante story about loan sharks. This is the worst case everywhere, exploiting the weakest by lending them money at high interest rates. First of all people should learn to live within their means and resources on hand instead of borrowing money. Borrowed money needs to be paid back with high interest rate which goes out of control. People learn to live within your means, even if you have to starve do not borrow money from loan sharks at high interest rates

    SYED J.HUQ, DUBAI, United Arab Emirates

  8. Added 09:09 March 18, 2013

    I lent money to a colleague without any interest as I believed in his excuses while asking for it. He was able to pay me 75% only of the total amount I have given only after more than a year. I think the reason why lenders used to get their important documents and huge interest because of these abusive borrowers! I have learned another great lesson.

    Antoun, Dubai, Philippines

Gulf News
Community Reports

More from Community Reports

Quick Links

  1. Business

  2. Sport

  3. The latest Entertainment news

  4. The latest Lifestyle stories

  5. Opinion

Gulf Country Finder

  1. The latest news from the UAE

  2. Saudi Arabia

  3. Qatar

  4. Bahrain

  5. Oman

  6. Kuwait

  7. Yemen

Region Country Finder

  1. Syria

  2. Palestinian territories

  3. Jordan

  4. Lebanon

  5. Iran

  6. Iraq

  7. Egypt

Influencers

  1. United States of America

  2. India

  3. Pakistan

  4. United Kingdom

Regions

  1. Gulf

  2. Region

  3. The latest news from around the world