Why Philippines 5-6 Cash Loans Are Dominated by Indians (Bombay Loan)

For almost a century now, Indians or Bombay as we call them have dominated small financing business in the Philippines.  They cater to poor and ordinary Filipinos who do not have the means to borrow from financing companies or banks because of lack of the needed properties to be used as collateral.

With Indians, they don’t need to present a collateral and borrowing small amounts of money is easy.  Pinoys prefer to borrow 5-6 cash loans from Indians mainly because of the following reasons:

 1.  They Are the Ones Offering Loans

If you have a livelihood, no matter how small it is, a Bombay will readily approach and ask if you want to take out 5-6 cash loans from him.  No legalistic papers to sign, no background checks in most cases.  Familiarity with you is something that they first consider and there is no more need to tell them about your finances.

 2.  They Are Easy To Deal With

If you fail to pay, they will just say “Okay lang” and will just return the following day.  Very seldom can you see a Bombay forcing the issue about your payment.  There are even those who were not able to pay completely and its okay with them.  But most poor Pinoys make it a point to pay their Bombay 5-6 cash loans because failure to pay will mean being blacklisted.

For ordinary Pinoys, 5-6 cash loans are very important and actually gives them the needed money during special or emergency occasions.  It is even normal for one person to have loans from several Indians at the same time.

Indian loan sharks know how it goes with poor people and understands well the Filipino psyche that’s why poor and ordinary people prefer to get a loan from them.  With banks, this is not possible as they even have collectors and will scare you with legal charges if you fail to pay.

 3.  Bombays Make It Easy For You To Pay

despite the horrendous interest charge of 5-6 cash loans, when you look at it, it is still easy to pay small loans on a daily basis and to this, the Indians are very good.  They will visit on a daily basis and collect as small as P30 pesos from their clients.

 4.  They Are Always Available When You Need Them

When it comes to trying ties, you can always count on Indian loan sharks to loan the cash needed.  No ifs and buts, as long as you have good record, they have the money right then and there in most instances and will instantly give the loan requested.

These are the main reasons why Indians dominate micro-financing in the Philippines.  The 5-6 cash loans have been part of the economy long enough for Filipinos to appreciate and actually rely on it.   Even if there is a Usury law, Indians still managed to conduct their business without hassle from the authorities.

 5.  The Interest Charges And The Length Of Payment Are Negotiable

The 20% interest charge for a 40 day loan can actually be extended to 60 or 70 days.  Some even reach 100 days because of the inability to pay on a daily basis.  This is already a big help to most poor Pinoys and it becomes even more encouraging for them to see that Bombays do not force them to pay in most cases.

This is not possible with most micro-financing companies as they will inject surcharges and additional interest charges if you fail to pay on the agreed duration of the loan.  Flexibility is very much part of 5-6 cash loans from Bombays that’s why Filipinos prefer them over companies.

The Asian Development Bank in one report stated that the availability of micro-financing in the Philippines is in place but very few poor Pinoys actually availed of this opportunity.  This can be traced to the apprehension of financing companies to give out loans to poor people.

As long as the micro-financing system is not the same with how Indians or Bombays do this business, the 5-6 cash loans will still persist in the Philippines.

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6 Responses to Why Philippines 5-6 Cash Loans Are Dominated by Indians (Bombay Loan)

  1. G! says:

    You guys who are against indian nationationals in this country are just ignorant and jelouse. I’m a filipino btw but I know better. Don’t ignore the fact that conditions and interest rates are set when both parties are getting into this transaction. So, don’t act like you weren’t aware. Those people are just bitter cuz they don’t want to pay or just simply didn’t have any business sense. In the states, credit companies can charge you from 16% close to 30%. Don’t drag your church derived values either by saying that this is immoral, cuz if it is, then you shouldn’t be borrowing in the first palce. So, if you borrow, then be ready to pay them, you bitches!!!

  2. jimto says:

    Obviously you know nothing about how 5-6 loans with Indians work. Trust me I know how it works.
    It’s not 20% interest per day as you claim. It’s 20% for 40 to 60 days loan depending on the arrangement.
    Also, it is not only Indians that are in this business but also lots of Filipinos.
    I agree that the interest rate is usurious but given that lots of Filipinos could not afford the requirements of financing companies, they consider it better to get from Indians instead.
    You and me will not get 5-6 cash loan from Indians because we can afford not to but a good number of poor Filipinos consider them the last resort. I’m the Vice President of one of the private markets in Metro Manila and have seen how a good number of small entrepreneurs were able to survive lean months and also cash emergencies because of loans from Indians.

    Thanks for visiting the site Henry

  3. henry kob says:

    omg you make these loan sharks out to be all good and bla bla
    crap!!!!!
    do you know??
    ok you need 20,000 loan
    you approach me the indian loan shark
    ok i say, but first
    come to my store and buy 1000 worth of sheets and towels and other useless junk you do not need
    ok so you got the loan
    but
    it is a 20,000 loan and because of the towels and other crap.
    you now have 19.000
    interest is 20% a day
    if you cannot pay..
    no probs i will come and take electrical items from your premises…
    good so far
    and worse
    so for ever in a day you are now my employee
    because i damn well know you will never be able to pay the dumb loan off
    slowly but slowly i own the whole street
    total tax evasion
    this should be called a money pit…………….
    these exploiters should be booted from the country……

  4. jimto says:

    It is just how they came to be called in the country because the early Indians in the Philippines who engaged in 5-6 loans were from Bombay, India according to old folks. There is no racism here whatsoever as they are even looked upon as the “Go To” guys when people need personal loans. :)

  5. Dr Masahiko Kawashima says:

    It is amazing how racist that term “Bombay” is if African people were doing this would it be termed “N-word” 5-6 loan? Just asking.

  6. Marivic Jamila says:

    hi,do u have friend bombay here in cebu?, please refer me…coz i need money now for my house problem,.thank you very much.

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