The new generation of Punjabi money-lenders in the Philippines is "spoiling the entire show", as per the old-timers in the business.
Veteran financiers say that youngsters from Punjab jump on the money-lending bandwagon without having basic knowledge of the local language, people and areas, which leads to heavy losses in terms of money and lives.
"They take the plunge without learning the tricks of the trade. In the bargain, they suffer losses and some of them pay with their lives," said Chitwant Singh (41), who arrived in the Philippines almost 20 years ago. Talking to HT on the phone, Chitwant said his contemporaries started by trading in electrical appliances and other small goods in which the risk factor was low.
"While selling these goods, we learnt the local language and got to know people. Now, just for quick gains, the new generation straightaway starts lending money despite being unable to assess whether a particular borrower would return the money or not. Unfamiliar with the lingo, they often enter into quarrels, which leads to serious trouble," said a moneylender, who started his business without any investment. Nowadays, youngsters sell land and properties to launch their money-lending business, he observed.
Chitwant further said that some Punjabi youngsters took to drugs, drinking and womanising. "They start living a luxurious life without actually earning anything," he said, adding that a free society didn't mean forgetting one's ethos and traditions.
"Indulging in drinking and drugs makes business suffer. When a money-lender is irregular in collection, borrowers try to exploit the situation," Chitwant said. He mentioned that such rookies, in a bid to earn more money, offered lower rate of interest and lent money without verifying the loan-seeker's credentials. The non-institutional loan is offered at 10% to 20% annual rate of interest, without a written agreement.
A Punjabi living in Manila told HT on the phone, "In the late 1980s and early 1990s, one could simply board a flight to Manila and try to settle down in the country. Now, the norms are strict.
Even those with a valid visa are sent back," he said. "Still, a large number of youngsters are entering the Philippines via Singapore," he added. Once a Punjabi enters the Philippines, he never goes back till he gets valid papers for legal stay in the country. Most of the youngsters prefer to enter into an agreement of marriage with the local women.
A Filipino woman agrees to a contractual marriage with a Punjabi for a monthly payment of 1,500 to 2,500 pesos (Rs 2,100 to Rs 3,500). 'Contract' wives agree to cancel the marriage on getting 25,000 to 50,000 pesos (Rs 35,000 to Rs 70,000).