RIYADH, 14 February 2004 — Overseas Filipino workers (OFWs) in the Kingdom have been cautioned against lending money to fellow Filipinos for the purpose of earning interest rates.
“We urge compatriots to be more circumspect in lending money for the purpose of earning through the interest paid them. They have no legal basis to go after the borrowers if the latter refuse to pay,” a senior embassy official told Arab News over the weekend.
He said, however, that the embassy could mediate between the lender and borrower to settle disputes amicably. “They can come to the embassy where to hold talks and settle the issue,” said the official, speaking on condition of anonymity.
He made the statement after being asked what the embassy can do on the case of an OFW working at a local hospital here who lent some SR15,000, but could not collect both the interest and the borrowed money. It was learned that the borrower simply ignores the lender and hardly says a word when is she going to pay.
Several cases about bad borrowers have also reached Arab News in the past.
An executive based in Jeddah complained that when he sought payment for the “emergency loan” he gave to a hospital worker, the borrower threatened to report him to authorities for engaging in usury.
Still another case involved a Filipino worker who refused to pay the money he borrowed from a Bangladeshi. When another Filipino who acted as guarantor tried to intercede, the borrower told him dismissively: “I will pay when I want to.”
The embassy official said they could not interfere in such cases because “the relationship between the lender and borrower is personal.”
Officials at the Philippine Overseas Labor Office (POLO) said they could do more than just mediate.
Labor Attaché Manuel Roldan said the POLO could go the extra mile “to let justice and fairness prevail” if they notice a case of bad faith on the part of the borrower.
“When necessary, we can call the employer to force the borrower to pay, in the name of fair play. One time, a cargo forwarder approached us to complain that an OFW customer to whom it advanced remittance money did not want to pay so we called his employer. He had no choice but pay,” added Labor Attaché Angel Borja.
Other officials as well as some community leaders noted, however, that lenders better be selective because there’s no local law that protects the lender from the borrower who refuses to pay. They noted that even the best of friends have parted ways because of unpaid debts.
Two years ago, a clerk from Zamboanga del Norte province in the southern Philippines borrowed some SR30,000 from a bank he was working with in Jeddah. The man then absconded with the wife of someone else and never returned to the Kingdom.
As a result, the borrower’s best friend — a parcel company worker — who acted as guarantor was forced to pay the loan, Arab News learned.
Still, many OFWs lend “just to make idle money earn additional income.” The interest rates range from five to ten percent.
And because lenders make good money, some have taken the risk of not getting paid and have even expanded operations.
“Money-lending is risky but by being friendly, understanding and ability to enlist the help of others help a lot,” said one OFW lender.
