SINGAPORE - People have labelled him a "licensed loan shark".
It is a comment made in jest, but it never fails to make licensed moneylender Sean Chia go on the defensive.
"I tell my friends I'm quite sensitive to the word loan shark. I don't like to be lumped together with them because what they do is illegal," says the 46-year-old, who collaborates with his brother, the owner of a debt-collection agency.
The bespectacled, kind-looking man looks nothing like an "Ah Long".
But some of his old acquaintances have dissociated themselves from him since he joined the moneylending industry.
Mr Chia, a former property consultant, set up Moneyhub Credit about three years ago, pumping in a six-figure amount he saved up over the years.
Licensed moneylending came under the spotlight last week, when the Monetary Authority of Singapore (MAS) announced new limits on borrowing.
As licensed moneylenders come under the purview of the Ministry of Law, the new rules do not apply to them, but MAS said in a forum-letter response that they would be working to fix this.
Mr Chia, who ditched his lucrative but stressful job to spend more time with his young children, says the switch was a 180-degree change.
"I used to mingle with bankers, lawyers, developers and tai tais. People for whom money was never a problem. They had too much of it," he says.
"These days, my clients are people who need cash, and they come from all walks of life."
Mr Chia keeps an eye out for youngsters decked out in designer gear and who know a thing or two about the engines of fast cars, and yet ask for a loan.
He reckons they are more prone to overspending, and he may not get his money back.
"I don't really want to lend them the money to encourage their lavish lifestyle," he says.
Loans can be approved on the day of its application.
"We typically check with the Credit Bureau and have a standard procedure for assessing the person's risk before we grant the loan," says Mr Chia, who loans out amounts between a few hundred dollars and tens of thousands.
Half of his clients are foreigners and most of the debtors are between their mid-30s and mid-50s.
Loan amounts can snowball up to triple the principal amount, Mr Chia says.
"When a debtor earns more than $30,000 a year, the final interest rate will be decided and agreed on by both parties. Interest rates can even go up to 100 per cent in some cases.
"Some borrowers go to moneylenders out of desperation, then when they've settled their stuff, they complain that they should not have been charged such steep rates, despite agreeing to the terms in the first place."
Business is usually brisk during the middle of the month, when people run out of cash.
On a good week, more than 20 customers walk through his doors.
But tighter government rules regarding unsecured loans and advertisements have shrunk the industry. Mr Chia estimates that there are about 200 licensed moneylenders here.
He insists that it is not an easy living.
"I wouldn't encourage people to come into this line at all. Sometimes it's not easy to deal with the clients, and despite my best efforts, I cannot always spot those who will result in bad debt," he says.
He recalls a senior investment manager who borrowed a few thousand dollars, but took off to his home in Japan without repaying the loan.
Says Mr Chia: "He looked legit on paper. He made about $15,000 a month. But when he failed to answer calls on his handphone, we called his office and found out that he had resigned. His landlord said he broke the lease.
"There wasn't any way of recovering the money," Mr Chia says, adding that bad debt makes up 30 per cent of total loans.
He is cautious about who he grants loans to because when they cannot pay, "it is the families that suffer".
"I've seen elderly parents who have to pay for children, and wives paying for their husbands," he says.
"They come to my office and often break down while explaining why they have difficulty paying."
Mr Chia notes that women are usually more responsible with their loans than men.
"There was once a debtor who didn't pay up and we had to visit his home," he recalls.
"When we arrived, he accused us of being loan sharks and kicked up such a ruckus that the police got involved, and everyone was hauled to the station.
"Thankfully, we didn't have to be handcuffed and the situation was resolved very quickly once I showed them my licence and the loan contract.
"The debtor called to apologise the next day."
Licensed moneylenders have to adhere to strict rules when it comes to debt collection, he says.
"We're not allowed to harass people or issue any sort of verbal threats.
"Showing up at the debtor's workplace is the very last resort because our interest is always to recover the money, so it wouldn't make sense for us to cause the person to lose his job."
Secrets of the trade
1) Always have a box of tissues at your office. Debtors and their families often break into tears while telling their stories.
2) When it comes to sussing out a bad debtor, there's nothing better than asking a host of questions. If the person is lying, his answers will contradict themselves after a while.
3) As far as possible, be kind to customers. They will recommend your service and word of mouth goes a long way.
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