Community hub
Recent from talks
Contribute something to knowledge base
Content stats: 0 posts, 0 articles, 0 media, 0 notes
Members stats: 0 subscribers, 0 contributors, 0 moderators, 0 supporters
Subscribers
Supporters
Contributors
Moderators
Hub AI
Loan shark AI simulator
(@Loan shark_simulator)
Hub AI
Loan shark AI simulator
(@Loan shark_simulator)
Loan shark
A loan shark is a person who offers loans at extremely high or illegal interest rates, has strict terms of collection, and generally operates outside the law, often using the threat of violence or other illegal, aggressive, and extortionate actions when seeking to enforce the satisfaction of the debt. As a consistent or repeated illegal business operation or "racket", loansharking is generally associated with organized crime and certain criminal organizations.
Because loan sharks operate mostly illegally, they cannot use the legal system to collect such debts, therefore they often resort to enforcing repayment by terms of blackmail and threats of violence. Historically, many moneylenders skirted between legal and criminal activity. In the recent western world, loan sharks have been a prominent feature of the criminal underworld.
Loan sharking is not to be confused with predatory lending with extremely high interest rates such as payday or title loans, which is sometimes considered to be "loan sharking" or at least, unfavorably compared to loan sharking by critics, regardless of whether it is legal.[page needed][page needed] A key difference between "traditional" loan sharking and predatory lending is that lenders alleged to be engaged in the latter practice are expected to stay within the law when making and collecting loans, and thus the debate into such practices often focuses on whether they are ethical as opposed to whether they are legal. However, laws regulating lending practices vary so widely between jurisdictions (even in the same country, particularly between states in the United States) that particular practices that might be technically legal (if arguably unethical) "predatory lending" in one jurisdiction might be considered illegal "loan sharking" if attempted in an identical manner in a different locale.
Regulation of moneylenders is typically much looser than that of banks. In Japan, the Moneylending Control Law requires only registration in each prefecture. In Japan, as the decades-long depression lingers, banks are reluctant to loan money and regulation has become tighter, illegal moneylending has become a social issue. Illegal moneylenders typically charge interest of 30 or 50% in 10 days (in Japanese, these are called "to-san" ('to' meaning ten and 'san' meaning three, or 10-3) or "to-go" ('to' meaning ten and 'go' meaning five, or 10-5), which correspond to effective interest rates of about 1.442 million % and 267.5 million % per annum respectively. This is against the law that sets the maximum interest rate at 20%. These lenders usually do business with those who cannot get more money from banks, legitimate consumer loans, or credit cards.
The Central Bank of Ireland was criticized for doing nothing to protect those with low incomes, the vulnerable or those who have low levels of financial literacy, from loan sharks, when it emerged in 2015 that up to 100,000 of the 360,000 loans given by the moneylenders violated the law.
Loansharking is one of the main activities of the Israeli mafia.
The National Bank of Kazakhstan has been consistently fighting loan sharks since 2018. Thus, the maximum interest rate on a loan was limited to no more than 100% of the loan amount.
In 2020, a financial market regulation agency was separated from the National Bank of Kazakhstan to monitor the rights and legitimate interests of borrowers, to identify and eliminate systemic problems of the financial sector of the economy. A unified state register of microfinance organizations was introduced to legalize lenders.
Loan shark
A loan shark is a person who offers loans at extremely high or illegal interest rates, has strict terms of collection, and generally operates outside the law, often using the threat of violence or other illegal, aggressive, and extortionate actions when seeking to enforce the satisfaction of the debt. As a consistent or repeated illegal business operation or "racket", loansharking is generally associated with organized crime and certain criminal organizations.
Because loan sharks operate mostly illegally, they cannot use the legal system to collect such debts, therefore they often resort to enforcing repayment by terms of blackmail and threats of violence. Historically, many moneylenders skirted between legal and criminal activity. In the recent western world, loan sharks have been a prominent feature of the criminal underworld.
Loan sharking is not to be confused with predatory lending with extremely high interest rates such as payday or title loans, which is sometimes considered to be "loan sharking" or at least, unfavorably compared to loan sharking by critics, regardless of whether it is legal.[page needed][page needed] A key difference between "traditional" loan sharking and predatory lending is that lenders alleged to be engaged in the latter practice are expected to stay within the law when making and collecting loans, and thus the debate into such practices often focuses on whether they are ethical as opposed to whether they are legal. However, laws regulating lending practices vary so widely between jurisdictions (even in the same country, particularly between states in the United States) that particular practices that might be technically legal (if arguably unethical) "predatory lending" in one jurisdiction might be considered illegal "loan sharking" if attempted in an identical manner in a different locale.
Regulation of moneylenders is typically much looser than that of banks. In Japan, the Moneylending Control Law requires only registration in each prefecture. In Japan, as the decades-long depression lingers, banks are reluctant to loan money and regulation has become tighter, illegal moneylending has become a social issue. Illegal moneylenders typically charge interest of 30 or 50% in 10 days (in Japanese, these are called "to-san" ('to' meaning ten and 'san' meaning three, or 10-3) or "to-go" ('to' meaning ten and 'go' meaning five, or 10-5), which correspond to effective interest rates of about 1.442 million % and 267.5 million % per annum respectively. This is against the law that sets the maximum interest rate at 20%. These lenders usually do business with those who cannot get more money from banks, legitimate consumer loans, or credit cards.
The Central Bank of Ireland was criticized for doing nothing to protect those with low incomes, the vulnerable or those who have low levels of financial literacy, from loan sharks, when it emerged in 2015 that up to 100,000 of the 360,000 loans given by the moneylenders violated the law.
Loansharking is one of the main activities of the Israeli mafia.
The National Bank of Kazakhstan has been consistently fighting loan sharks since 2018. Thus, the maximum interest rate on a loan was limited to no more than 100% of the loan amount.
In 2020, a financial market regulation agency was separated from the National Bank of Kazakhstan to monitor the rights and legitimate interests of borrowers, to identify and eliminate systemic problems of the financial sector of the economy. A unified state register of microfinance organizations was introduced to legalize lenders.