Cuepacs president Datuk Azih Muda says some 150,000 civil servants are clients of illegal easy credit schemes and loan sharks. – The Malaysian Insider file pic, March2, 2016.
Illegal money lenders or “ah long” are operating inside the civil service, with some government staff working part time as loan-shark agents, the Congress of Unions of Employees in the Public and Civil Services (Cuepacs) says.
This is making it hard for the government to curb the use of loan-shark services, president of the umbrella body of Malaysian civil service unions, Datuk Azih Muda said.
“There are runners (agents) looking for a means to earn, if they manage to get a client, they receive a commission and a portion.
There is already a ceiling for loans for civil servants at 60% of deductions from their income but loan sharks still offer illegal loans on the remaining 40%.
“They (loan sharks) can still do business with people having 40% income in hand and prey on those who are desperate.”
Azih told a Bahasa Malaysia daily last month some 150,000 civil servants or 12% of the government workforce was borrowing money from illegal easy credit schemes and loan sharks.
Most were earning under RM3,000 a month and struggling with rising living costs.
A civil servant in the finance department of a government-linked company (GLC), Mohd Ramli Ridhuan, 31, said he knew of loan sharks who recruited agents among staff to find new clients.
“In the ministry where I work, there are civil servants working part time as loan-shark agents and targeting their colleagues who fail to get bank loans.
“These agents know those who are in need of cash immediately and move in to recommend the loan-shark services,” Ramli told The Malaysian Insider.
He said many took up illegal loans because of the fast and easy process which did not require so many forms.
“The transaction can be finalised in a day. Those who don’t have savings and need cash urgently are forced to use loan sharks’ services.”
Ramli also related an incident where an agent had come to his office in search of a colleague who had fallen behind on repayments.
“There have been instances of hired debtors entering government offices to search for borrowers and to collect payment.
“From this, we learnt that many civil servants were taking loans from illegal money lenders.”
Ramli said some debtors opened a separate bank account and asking payroll to deposit allowances into that account so that loan sharks could not access the money.
This was because repayment typically involved loan sharks holding the ATM card and PIN number of the debtor’s account and withdrawing the amount owed each month from their salaries.
“I’ve got colleagues who ask for their claims and allowances to be wired to a different bank account than the one for their salaries,” said Ramli who handles payroll in his office.
Although Cuepacs was worried about the trend, Azih said, little could be done despite there being disciplinary provisions for civil servants who took illegal loans. For one, evidence was hard to obtain because of the scanty documentation required.
“Cases of illegal money lending are hard to detect early as they occur outside and no documents are involved, only that the borrowers’ ATM cards are held by the loan sharks.”
An employee in a serious debt situation can face action in the form salary cuts but this could expose the civil servant to even greater harm.
“We cannot take action, as even if we obtain proof, we will put them (the borrower) in danger. They could face a loss of income, sacking and place their entire family in danger from a loan shark.
“How will they repay their debt when their situation is so dire?”
- TMI
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