Moneylending
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Moneylending is a trade in which money is lent to individuals and corporations. It can be seen as an primitive form of banking.
Even though the banking system is well established in the modern era, moneylenders are still common. They sometimes lend to people like gamblers and compulsive shoppers who often get into debt.
The regulation of moneylenders is typically much looser than that of banks. In Japan, Moneylending Control Law requires only registration in each prefecture.
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Consumer loan companies
Consumer loan companies are those that provide a moneylending service to individual consumers and small companies rather than to big corporations. Unlike banks, their service is limited to moneylending because banks are usually reluctant to lend money to individuals.
Yamikinyu (loan shark)
In Japan, as the decade-long depression lingers, banks are reluctant to spare money and regulation becomes tighter, illegal moneylending has become a social issue. Illegal moneylenders typically charge an interest of 30 percent in 10 days or 50 percent in 10 days, which is well over 1,000,000 percent per annum. This is against the law that sets the maximum interest rate at 29.2 percent. They usually do business with those who cannot get more money from banks, legitimate consumer loans or credit cards.
See Also
- Usury covers the religious and historical injunctions against moneylending.
External links
- The money hole (http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?fl20030914a1.htm) - an article about loan shark problem in Japan.