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Illegal loans rose almost 60 percent last year as Singaporeans reeling from the economic crisis turned to loan sharks to tide them over the tough times, a senior police official said Monday.
There were 18,600 cases of illegal loans made by loan sharks last year, a 58 percent increase from 11,800 cases in 2008, said Ng Boon Gay, director with the criminal investigation department.
Illegal moneylenders lend at exorbitant interest rates and use threats and intimidation to pressure debtors to pay up if they renege on payments.
“We expect loan shark cases to continue to be a concern. We’ll try to take it down, but we’ll see how it will turn out,” said Ng.
“We are watching it very carefully,” he said.
Ng said the police arrested 958 illegal moneylenders last year, a 90 percent jump from 2008 as the economic slump pushed cash-strapped locals to turn to loan sharks.
“Because of the economic crisis at the time, we expected… UML (unlicensed moneylender) cases to go up because there are people with financial difficulties and some may resort to these illegal means,” he said.
Singapore’s economy shrank 2.1 percent last year after slipping into a severe recession in the third quarter of 2008 due to the impact of the global economic crisis.
Although Singapore has pulled out of the slump, the loan shark situation is not expected to improve as “the percentage of bad debt has actually increased” following the crisis, Ng said.
“Even though there is some upturn in the economy, based on the data that we get… we expect it to increase,” he said.