Philippine Project Notes:
Trying to break the 5/6 Loan Scam.
By Tim Roach
Copyright 2007


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What is the 5 / 6 loan scam?
Here in the Philippines, it means if you borrow 5 pesos you will pay back 6 for each MONTH (5000 would be a pay back of 6000). That works out to 20% per MONTH. 40% if one keeps the money for 2 months, 60% for 3 months, etc.
My solution:
Being the fun loving person I am that likes to put dents in things or, better yet, completely break things that I believe deep in my soul to be wrong. I put up a lot of my own money for my associates to give personal loans at greatly reduced preset fixed rates.
My logic for doing this has two parts:
1: It is almost impossible to get out from under a 20% monthly interest rate if we can drop it to something more reasonable then people might be able to get out of debt and in control of their lives again.

And

2: Basic Economics. The less interest people have to pay the more money they can keep and use to buy things they need. Having that happen will help the local economy become stronger. At that point EVERYONE benefits.
My associates have been a little afraid of doing this saying that the larger loan "bosses" will be mad at me and may try to harm me. To which my response has been, "Let them be mad, when they lower their rates to something semi reasonable we will stop doing the loans. As for harming me, if they try that I am sure someone will come out hurting, maybe me, maybe them, or perhaps both. Hopefully we never have to find out which."

With the personal loans, our rates are higher than I would like them to be. But even at this interest rate we can just barely handle the number of people wanting loans. And that is from people just hearing about us doing the loans from each other.

At this point we have loaned to help people get everything from crop seed to vehicle refinancing to helping people get real medical treatment. (I'll talk more about the medical garbage which happens here. Some of which is funded by 'donations' from other counties on another page. Once I get more proof.)

We have been doing the personal loans for a few months. And there is a little good news. It seems at least one of the lending groups has starting to lower their rates. A few people have come in saying that so-and-so in one of the neighboring towns is offering loans at a few points less than we are!

Our response has been to tell them to read the fine print very carefully and make sure the group is not charging some other higher fee and just not calling it interest. But if the total payback amount with the other group is really lower go use them instead of us.

I guess that sounds strange to actually WANT to loose clients. But in this case, with our primary objective being to help all the people of the area, what helps the people through out the region will help our business in the long run.

There have been some polite suggestions (threats) about our personal loan practices but so far no actual actions have been taken against anyone in the group or myself.

Maybe that has something to do with showing the people working with me, that are willing listen, basic effective self-defense moves or maybe as we like to think the Guardian Angels are working over time to protect us.

Though I suspect it is a bit of both.



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Page Last Updated: 1/29/2007 8:20:25 PM