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.