Advocacy group for victims of moneylenders slams ministry's awards night

A group that has been advocating for victims of loan sharks and licensed moneylenders has questioned the housing and local government ministry's recent move to hold an awards ceremony in honour of moneylenders and pawnbrokers, saying it gives a false picture of the reality of dealing with such companies.

The Malaysian Muslim Consumers Association (PPIM) also wondered why the ministry was so quick to fete these companies, considering the number of cases where borrowers have been victimised, including those who have been threatened with violence for failing to settle their debts.

"This sends the wrong message, because if we organise events like this, it would only make them feel more secure.

"It's as if they have done nothing wrong, so it's in their favour," PPIM president Nadzim Johan told MalaysiaNow.

He said lopsided agreements with hidden terms and conditions have made it difficult for borrowers to settle their debts.

He also referred to similar experiences with pawnbrokers who would often cheat on the weight of gold.

MalaysiaNow earlier reported that the 2024 Madani Credit Awards was held on Nov 15, an event organised by the ministry together with associations of moneylenders and pawnbrokers.

The event, the first of its kind in Malaysia, is believed to have been the brainchild of the minister himself, Nga Kor Ming, also the DAP vice-chairman.

It was held at the Berjaya Times Square hotel, whose owner tycoon Vincent Tan was also among the guests.

Video clips from the event sparked a flood of criticism on social media, with many saying it as an example of how DAP is increasingly using its position in government to reward an industry that is seen as part of its ecosystem.

Nadzim said the ceremony was tantamount to whitewashing the victimisation of borrowers by moneylenders, despite the ministry being aware of the serious cases involving the sector.

"We have received many complaints from people who say it doesn't make sense," he added.

Nadzim questioned the ministry's move in 2019 to rebrand licensed moneylenders as "community credit", saying this, too, sent the wrong signal to the public.

"They should be doing what they can to protect consumers," he said.

"These groups should not be honoured with such pomp and ceremony. It isn't right."

When contacted, former housing and local government minister Zuraida Kamaruddin  said the rebranding of licensed moneylenders was intended to protect small businesses from being scammed.

She said there had never been ceremonies like the one organised by the ministry under Nga.

"I have never organised any awards ceremony or encouraged the public to have dealings with moneylenders," she told MalaysiaNow.

Among the thousands who criticised the event on social media is Ahmad Daud, who said he was one of the victims of licensed moneylenders.

Speaking to MalaysiaNow, Ahmad said he was taken aback to see the clips of the event.

"Don't they know how many Malaysians are suffering because of unscrupulous moneylenders?" he said.

"My wife and I struggled for six years to repay money we never borrowed, all because we didn't understand the written agreement."

Ahmad said he borrowed money to pay his mother-in-law's medical bills.

"After she died, we were still paying off our debts. How can the ministry honour these gangs?"

Last year, there were over 4,400 licensed money lenders and 881 pawnshops in the country with a market value of nearly RM25 billion.

Ahmad's experience in dealing with moneylenders gives an idea of why the sector has a negative public image.

He said he applied for a loan from a moneylender in 2017. However, the contract he signed contained hidden costs in the form of monthly interest charges, for which he had to pay interest starting from RM300 every month, which increased every month.

Eventually, the interest rates were so high that he could no longer pay the monthly loan instalments.

He said that there were times when he could not pay the monthly interest as he prioritised the loan instalments, which caused the interest to increase in the following months.

"Licensed or not, they are all the same to me," Ahmad said.