A small item in the back page of a Chinese newspaper caught my eye. A man in his early fifties hanged himself in his small coffee shop in Ipoh. Apparently, he had borrowed money from the loan sharks, or Ah Long, as they are commonly called. He could not repay his debt, and so took his own life to end all his trouble.

The alarming increase in suicides and suicide attempts in Malaysia is itself worth of study and reflection. But we will leave it to another day. What fascinates me here is how illegal borrowing has permeated our underground economy, without anybody seeming to take much official interest.

Loan sharking has always existed, especially among the Chinese community. Even in the national Chinese dailies, there are often weekly reports of victims being harassed and intimidated by loan sharks who will resort to all manners of original tactics to recover their debts. Family members of the borrowers who have fled have become the target. They usually flock to Michael chong's office and seek his advice and intercession.

This Michael Chong (left) is quite a character. He is in charge of the MCA Public Service Bureau, or something or other with such a fancy name. He specialises in solving all sorts of personal problems for the people, and is probably better known among the Chinese voters than many MCA YBs. Over the many years of working at this unusual profession, he must have accumulated a considerable amount of contacts and resources that can best be described as off-the-beaten-track.

Just last week, he revealed through the press that a group of Datuks owe a huge sum of money, and have absconded, prompting the Ah Longs to grumble that even titled people could not be trusted with substantial speedy loans.

What attracts clients to these unlicensed money-lenders is indeed the speed and ease with which the loans are given.

Banks and financial institutions are very conservative these days. Unless you are already rich, have a big monthly income and many properties, getting a loan of any size from these legal lenders takes ages, numerous credit rating checks and tons of documentation. Small businessmen in a financial bind do not have the luxury of waiting for the slow grind of our financial institutions.

Harsh terms

In contrast, the illegal operations can give instantaneous approval to your request for loans, as long as you agree to their terms. Their terms, written in legal documents nowadays, are harsh. The interest rates can run well over 20% per month. Defaulters are not likely to be treated with courtesy. But people desperate for quick cash will agree to anything.

The borrowers are mostly small businessmen and petty traders. One could make a political case out of this scourge of course. The petty traders and small medium enterprises are pretty much left to their own, and seldom receive attention and assistance from the government. Apparently, this neglect has something to do with our politics of race. Whenever strapped for cash, they look to the underground money market for temporary relief.

Nevertheless, it contradicts the logic of business. The average profit margin for small businesses can hardly be the sort that justifies loans which come with the monthly interest rates of 20% or so. Businessmen probably comprise a small proportion of the loan sharks' clientele. I suspect gamblers would form the greater part of the loan sharks' customer base.

Gambling is the invisible but ubiquitous scourge that rage through the daily life of our society. The Chinese seem to be particularly prone to a dose of gaming once every so often. In these hard times of rising cost of living and shrinking opportunities, the dream of making one big strike at the table or the track is common talk among friends.

Now with global real time television coverage of sporting events, especially football, the playing field is unlimited for the gambling addicts. The English Premier League is the favourite. Why else do you think Malaysians are so crazy over football? Already, many gambling fans are salivating over the rich pickings at next year's World Cup.

Why they are so feared

I hear the gambling compulsion is one of the worst psychoses that can infect human beings. Driven blindly by this prospect of a big win in just one more bet, no matter how bad the financial situation is at the moment, gamblers become willing clients for the loan sharks. For some, when debts become unserviceable, the only way out is either suicide or running away.

The strong arm tactics employed by the loan sharks to recover bad debts is the reason why they are so feared. True enough, they seldom kill or maim people these days, but they seem to have refined their techniques of intimidation and humiliation down to an art form. Sometimes, the victims are so desperate that they retaliate violently. Illegal money lending is a business that is not good for health, for both lender and borrower.

Why do people do it then? Why do big bosses and small foot-soldiers take such high risks with their good cash and their personal safety?

For the big bosses, it is an efficient and profitable way of laundering money earned elsewhere. All income from such loans is tax-free after all. It certainly beats investing in shares and stocks, or putting the money in banks that now offer ridiculously low rates for saving deposits.

Nowadays, they organise their operations with such management techniques that can be the envy of modern corporations. Apparently, some even have a national network, a pyramid-like structure of state, regional and local cells that employ numerous people to ensure maximum efficiency. They have a system of motivation and rewards based on employees' performance. Staff discipline is apparently not much of a problem.

Taking the risks

They have no problem also with recruitment. Beneath the veneer of bright economic growth in Malaysia, there are many pockets of depression. Young men who drop out of school early get bored with the sedate lifestyle of small towns and new villages. Inevitably they look to the bright lights of the metropolis for the promise of a good life.

In sprawling cities like KL and Johore Baru, money is everything. With money, you can buy anything, irrespective of where you derive your income. Cash is king.

Without much marketable skills and academic qualifications, with good paying jobs so out of reach, it is easy for these young migrants to the city to seek employment in the alternative economy. Of course, one risks brushing with the law, and one - like a soldier on the battlefield - is never too sure about tomorrow. But as these individuals will tell you, living a life compels one to many roads, some straight and some crooked. Money is quickly earned, and even more quickly spent.

Do they ever have any twitches of moral discomfort, sometimes?

If you have a chance to lend them your ears, they will spell out their logic. Nobody ever force people to borrow from them. The loans are a commercial transaction like other legal transactions. The contractual agreement involved in such a transaction is made between two willing rational parties. Like all agreements, the terms and conditions must be adhered to. If you owe money, you must pay up. It is as simple as that.

They will further tell you that what they do may be illegal in the eyes of the law. But they are providing a valuable service, and they are also governed by the iron economic law of demand and supply. At least, they do not commit crimes like murder, robbery, arson, rape or extortion. Their trade is a business, like any other. They just want to cari makan , like all Malaysians. And so on.

Obviously, the phenomenon is much more than a straight case of organised crime. Its causes lie very deep within the political, social and economic fabric of our entire urban life. The police top brass probably know this, and as long as it does not pose a serious threat to national security in a big way, and these people can be contained, they will just let this headache be, for the moment.

For those of us who live under the bright sunlight, the dark world of underground businesses will remain in the shadow. It is best never to get entangled with them in any way, lest we lose our pound of flesh.