Extortion: Swimming with the loan sharks
Despite law banning private lending, loan sharks continue to prey upon the naïve.
LAHORE:
“I have been warned numerous times, including death threats, to stop speaking against this lending mafia,” says Arshad Tufail, who has run an organisation focused on eliminating private lending for forty years.
“Every day, there are new cases of exploitation,” he says, adding that there are private money lenders all over Pakistan who continue to operate without fear, despite laws against the practice. Some weeks Arshad takes on ten new cases; other weeks the numbers go into the hundreds.
Nayyara Sultan is just one of the many victims of loan sharks that Arshad’s organisation helps. In 2007, Nayyara’s husband took out a loan from a private lender. The loan of Rs350,000 had an exorbitant Rs25,000 a month interest rate, with no time period specified for its return. As long as he paid the monthly interest, he faced no trouble; after three years, he had paid almost triple the amount he had initially borrowed.
Last year, his business ran into trouble and he was forced to default on his monthly installment. The lender took blank cheques from Nayyara’s husband and son as a guarantee in case of default. Using those cheques, he registered cases against Nayyara’s husband and son, forcing them to disappear. “I have not met my husband and my son for over a year now. They are too scared to return,” she says.
After their disappearance, Nayyara was frequently harassed by the lender’s goons, until she started to pay them. She claims the lender stole the diary she maintained the payment records in and is now asking her to start the payments from scratch.
She tried asking the police for help, but says they ignored her pleas due to the cases registered against her husband. This is common practice. According to Arshad, the police are helpless in Nayyara’s case as they have complaints from five or six different people against her husband. “The lender is smart. He takes blank cheques and distributes them to different people, who then go to the police claiming financial fraud against the debtor,” he adds. Thus the police side with the lender instead of the victim.
In cases like this, Arshad calls in help from other sources. “I am in touch with Jamat-ud-Dawa, whom we have called to settle Nayyara’s issue,” he says. Indeed, a few minutes later he is joined by a heavy set man who introduces himself as Imran.
Nayarra, Imran and Arshad discuss their strategy and then head to her shop to resolve the issue. Before that, though, Imran gives her a lecture about how interest is ‘haraam’ in Islam and she should have been more careful. When asked why he does this, Imran states that it is a duty of every Muslim to declare war on interest-takers, as directed in the Quran. “The Jamat has different departments, and I deal with such social evils,” he adds.
The police refuse to help Arshad – but he does have the law on his side. A private money lending bill was passed in the Punjab Assembly in 2007, after Arshad convinced Humaira Shahid, a Pakistan Muslim League-Quaid legislator, to join his cause. But Humaira feels that even with the law in place, convincing the police to charge people remains a challenge. “I am sad that a law I fought for – for over four years – has still not been implemented, and private lenders continue to exploit poor people,” Humaira says.
Published in The Express Tribune, February 16th, 2012.
“I have been warned numerous times, including death threats, to stop speaking against this lending mafia,” says Arshad Tufail, who has run an organisation focused on eliminating private lending for forty years.
“Every day, there are new cases of exploitation,” he says, adding that there are private money lenders all over Pakistan who continue to operate without fear, despite laws against the practice. Some weeks Arshad takes on ten new cases; other weeks the numbers go into the hundreds.
Nayyara Sultan is just one of the many victims of loan sharks that Arshad’s organisation helps. In 2007, Nayyara’s husband took out a loan from a private lender. The loan of Rs350,000 had an exorbitant Rs25,000 a month interest rate, with no time period specified for its return. As long as he paid the monthly interest, he faced no trouble; after three years, he had paid almost triple the amount he had initially borrowed.
Last year, his business ran into trouble and he was forced to default on his monthly installment. The lender took blank cheques from Nayyara’s husband and son as a guarantee in case of default. Using those cheques, he registered cases against Nayyara’s husband and son, forcing them to disappear. “I have not met my husband and my son for over a year now. They are too scared to return,” she says.
After their disappearance, Nayyara was frequently harassed by the lender’s goons, until she started to pay them. She claims the lender stole the diary she maintained the payment records in and is now asking her to start the payments from scratch.
She tried asking the police for help, but says they ignored her pleas due to the cases registered against her husband. This is common practice. According to Arshad, the police are helpless in Nayyara’s case as they have complaints from five or six different people against her husband. “The lender is smart. He takes blank cheques and distributes them to different people, who then go to the police claiming financial fraud against the debtor,” he adds. Thus the police side with the lender instead of the victim.
In cases like this, Arshad calls in help from other sources. “I am in touch with Jamat-ud-Dawa, whom we have called to settle Nayyara’s issue,” he says. Indeed, a few minutes later he is joined by a heavy set man who introduces himself as Imran.
Nayarra, Imran and Arshad discuss their strategy and then head to her shop to resolve the issue. Before that, though, Imran gives her a lecture about how interest is ‘haraam’ in Islam and she should have been more careful. When asked why he does this, Imran states that it is a duty of every Muslim to declare war on interest-takers, as directed in the Quran. “The Jamat has different departments, and I deal with such social evils,” he adds.
The police refuse to help Arshad – but he does have the law on his side. A private money lending bill was passed in the Punjab Assembly in 2007, after Arshad convinced Humaira Shahid, a Pakistan Muslim League-Quaid legislator, to join his cause. But Humaira feels that even with the law in place, convincing the police to charge people remains a challenge. “I am sad that a law I fought for – for over four years – has still not been implemented, and private lenders continue to exploit poor people,” Humaira says.
Published in The Express Tribune, February 16th, 2012.