Sunday, April 28, 2013

China jails 1400 for loan sharking

China jails over 1,400 in loan-shark crackdown
People netted in the crackdown were convicted of violations including public advertising to find lenders and promising excessively high rates of return, Du said at a news conference. He gave no details. Legal experts say loans between individuals are legal and the government has failed to make clear what lenders and borrowers are allowed to do.
Loan sharks have a more balanced two-sided relationship with "clients" than the term implies in the west. They are known as much, or perhaps more so, as a means to invest for outsized returns than they are as place for the desperate to borrow. So this crackdown could theoretically been entirely over fundraising.
"Banks are offering fewer loans, because the bad loan rate is rising," said Zhou. "It is harder to get underground loans, too. People are more afraid of running the risk of lending money.

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