Loan Sharks, a frequent problem exclusively only to HDB home owners, why not condominium, and on landed property owners? One may wonder, but by just looking at the three options, the difference is clear-cut, the difference in education upbringing and perception to what it takes to be wealthy.
Loan sharks in Singapore is a business that will not disappear and vanish at least for the next two to three years despite the hard clamp down on the illegal business model. Like any other businesses, any business model that can generate money should be looked at and learn it’s pros and cons so as to re-model after a successful business model in short is copying. Business is all about copying, and to make the most money out of copying, you have to add a little bit of creativity into it.
Back to loan-sharks, as the words suggest, sharks, they go for the kill. Loan is a transaction between the lender and a distress borrower who has no means of ownership to any assets to make a legal loan from either banks or private money loaning companies and thus turning to them. Sharks are the fearsome marine animal in the ocean, especially the great white sharks.
As the term loan-sharks suggest, it is a simple model with a wise business model supporting the structure. Money lenders offering money loans to distressed borrowers at high interests killing the person who volunteer he/she to be the dish served on the plate.
While many people who take loan will give excuses or reasons saying that they are left with no choice, but to a wealthy mind-set person, this are all just excuses and seeking a temporary solution which will snowball into like a snowball on the top of the hill over time.
It takes two hands to clap, without either one; there will not be any sound. Having said it, here a flaw in the business which is noted by the experienced loan-sharks owners and thus they have a counter solution to verifying the lender’s home address with recent cases of people using their old home address to borrow from loan-sharks implicating the innocent and they (both parties) don’t care seriously.
Here’s something which I learnt from documentary, Great-White sharks although are the most fearsome marine animals in the ocean, the success rate of killing the prey is only fifty per-cent due to the poor vision. Once the shark knows that you’re not a push over, the shark will release you from her mouth. What you need to do is to continuously hit that shark in times of danger when bitten, best would be to hit and attempt to poke if not stab the sharks’ eye and you’ll be saved, if the paramedics arrived on time before another great-white comes to you with the scent of blood.
The newly set up loan shark businesses are often dumb and they don’t have checks to ensure that the borrowers are really living in that home, thus that’s why so many borrowers when fail to repay the interest, they run away from home leaving the other residents in lurch at the mercy of the loan-sharks. That’s when you’ll see news articles, spray paints poured all over the address but looking from business aspect, they are wasting more money in the process which is why I say they are dumb spending money on paint incurring risk of being caught on monitoring close circuit television to trap the runners. They should instead camp around the venue the borrower hangs out with or around the friends who knows he and wait for the prey to reveal it’s weak spot.
The experienced loan shark business operators will take steps to ensure the borrower is really living in that home by sending a runner to verify it, and to the extend check if there are valuable items to sell off in the effect should the person fail to do so. To top things off, they even request to see the family members and ensure that they know it before the runner confirms it and report back to the business owner/operator over the phone before the go-ahead is given to allow the transaction. This way, the chances of incurring bad debts is greatly reduced.
Don’t ask me how I know this, because I know of people who talked of his loan shark experience before when we were serving national service over a smoking break (I don’t smoke, but I join in to learn valuable information which can only be shared this way).
Here’s another piece of information which most people will not know. Loan shark business operators are supportive of each other, when the business is big enough or when a runner has lots of debtors, the operator will than hand the runner with a large database of referrals from debtors with a capital start-up of forty-thousand dollars and does his own business. What I don’t know is how they recover this investment, by the time I wanted to ask, our superiors shouted for us and the conversation ended. If I ever do get to ask again, than I’ll talk more about the details, either way, you can read up a book which talks about similar businesses “Freakonomics” to explore the business and understand the model behind those discussed in that book.
With that, your fate lies in your own hands, never ever borrow from loan sharks, when there’s a will, there’s a way. Make a dumb move, and you’re out of the game to wealth.
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