GROWING up as an Indian child in Bacolod, many natives would often label me as that “5-6 Turko” because of my parent’s occupation: which is to give out loans to small entrepreneurs in the country at high interest rates. This issue of moneylending has been highly contentious throughout the Philippines, reaching a climax when President Duterte urged to deport all of us “Indians.” Many assume that this is the reason that Philippines continues to be in rampant poverty, while Indian nationals rise in socioeconomic status.
All of these assumptions are clearly misleading and blur the reality of the status quo.
Firstly, 5-6 operates in such a way that there is no insurance of payment from the customer to the lender. This is true as there is no proper, legal documentation of a loan and henceforth no contract. The only guarantee is a verbal agreement between the two stakeholders. Thus, if a lender goes on his or her rounds for collecting money, and the customer refuses to pay, the lender cannot do anything. If the lender pursues the customer, he or she is put in a dangerous, fatal situation, bringing me to my second point:
Indian nationals are regularly murdered, across the country, because of this practice. If a lender pressurizes a client into paying, it is easier for the client to exterminate the lender in the first place, without any repercussions as the lender is a foreign national. People assume that Indians are benefiting off the poor Filipinos when in reality they are hoping to live through one day of their work and make it back to their families.
Furthermore, not every Indian lender is an aggressive loan shark. In fact, native clients like the ease of the service so much that they often engage in “renewals” or reimbursements in their borrowing plans. This is because of the difficulty of acquiring loan plants through banks, which mandate a barrage of paperwork and identification that the smallest entrepreneur doesn’t have the time, energy, or resources to acquire. Indian lenders eliminate this bureaucracy and provide instant access to funds, which is desperately needed by these small firms.
Finally, 5-6 moneylending is a volatile business. Due to the fact that there is not a guarantee of payback for every customer, lenders have to constantly make new customers for their businesses to survive. This often results in 12-hour workdays for the moneylenders, for seven days a week. This aspect of labor, when put into context with other professions, is highly immoral and draining. As a child, I’ve grown up seeing my parents only work and today, nothing has changed. This system drains all players.
Ultimately, we need to work with the government on a proper regulation system for these micro-financing agencies. It is important that these transactions are legally documented to ensure the accountability of not only the money lender, but the entrepreneur as well. Furthermore, the documentation mechanism will help keep tab of the flow of money within the country.
Additionally, through sensible government regulation, we can make the market more stable and sensible for lenders and entrepreneurs. Indian lenders are not horrible human beings: they are people with families and children to feed at the end of the day. They work hard, with minimal rest and in extremely risky locations, to build a better future for themselves. This is a common, human struggle.
And finding a solution to this problem, in other words, will help everybody lead more prosperous lives.