Unregistered lenders expect Christmas rush
Owners of two unregistered loan businesses are anticipating more persons seeking their services to do their Christmas shopping.
John Brown*, who readily identifies himself as a loan shark, told THE STAR that he lends a maximum of $20,000 to persons at 30 per cent interest on every $1,000 borrowed.
“Business is very good. It is a cash system. I hand them the cash and they give it back that way. Right now I have about eight persons line up to get money this week for Christmas. They need their ID, TRN, payslip and a proof of address to get the loan,” he said. Brown said that he made the decision last March to start his money-lending business.
Jane Black*, who also offers loans, reasoned that people will be looking for Christmas cheer, so she was looking forward to more lending.
She started the business earlier this year, from just loaning money from her personal account to an acquaintance.
“It was something that me and my boyfriend should have started but on that day I said let me risk it and it is paying off. A lot of people are coming to me now for loans,” she said.
Joy*, who says she frequently borrows from unregistered loan businesses, said that she prefers them than going to the bank.
“I don’t normally borrow large sums of money but when I am out (of cash) until payday, they help a lot. Sometimes I can even get the loan on the same day. You can hardly do that with a bank,” she said.
Trouble with the law
But chair of the Jamaica Association of Micro Financing, Blossom O’Meally Nelson, said persons who are operating unregistered loan businesses can find themselves in trouble with the law.
She told THE STAR that it is not illegal to lend money, as there is informal lending that happens on a continuous basis among persons.
However, persons who are lending at an interest rate can be locked up.
“If you and a person enter in a private treaty, and it is breached, you can sue them but there has to be proper documentation or if it is word of mouth, there has to be a witness. But for persons who are doing business, if we get some evidence at all, they can be locked up. They can be reported to the Bank of Jamaica, Consumer Affairs Commission or the police,” she said. O’Meally Nelson added that if a person willingly gets involved with a loan shark, there is no one who can help. She advises persons who are operating loan businesses to get registered.
Brown said that he is aware of the problems of not being a registered business.
“Banks do not like us because we are taking away their customers and we are not registered. But I am working on becoming registered,” he said.