Loan defaults by Filipinos working in Saudi Arabia have become a big headache not only for money lenders in the Kingdom, but also for other Filipinos acting as their guarantors.
Lenders who charge monthly interest rates of 5 to 10 percent have complained that borrowers either went into hiding or left the Kingdom for good, Arab News reported.
Worse, many of the borrowers use the money to purchase luxury items, the report added. Instead of using the loan to pay hospital bills or children’s tuition, they buy luxury items, like electronics, expensive watches, and clothes.
On the other hand, the guarantors of the loans sought help from the Philippine embassy, which consequently issued an advisory.
The Arab News report cited the case of a Filipino who works for a telecommunications company and who lends money at 7-percent monthly interest.
“One Filipino named Jewell Orias left the Kingdom clandestinely without paying money he had borrowed from me and others in Batha district. He owed me 3,000 Saudi riyals,” the Filipino said.
When he asked the guarantor to pay, it turned out the guarantor was working in a supermarket and can only pay “whatever little amount he has.”
Another Filipino said his wife, who is working in a government hospital, lent 35,000 Saudi riyals to a fellow Filipino nurse so she could apply to immigrate to the US 10 years ago.
“After depositing $1,000 in my wife’s account, no more repayments have come,” he said, adding it was ironic that his wife lost money helping a fellow nurse.
He said the difficulties in collecting payments had prompted his wife to limit her lending activities.
ATM’s PIN as collateral
At another government hospital in the capital city, lenders demand personal identification numbers (PINs) of automated teller machine cards as collateral.
“This certainly affects the borrowers’ dignity but they don’t seem to care. Imagine, a PIN is a personal thing and is being kept by somebody else because they borrowed money,” said a Filipino employee of a hospital’s water treatment plant.
Lending-related murder
One of the worst cases of Filipino money-lending activity involved a 56-year-old man in Tabuk, who was murdered in September 2007.
Police learned the victim was a lender who demanded ATM cards of borrowers as guarantee for payment. — JE, GMA News
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