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.