In the financial market, the term loan refers to the amount of money that an entity owes to another entity (individual or a group) with additional interest tags on it. This is kept on a record including the conditions, the actual amount, interest rate and the duration in which the amount has to be paid back to the owner. Sometimes this procedure is carried out illegally with high interest rates. The person who offers such loans is commonly addressed as the ‘loan shark’. Loan sharks often demand the repayment by blackmailing the individual or by the threats of violence. In the present century these loan sharks have disreputable recognition and are considered as the underworld criminals.
The history of United States shows the emergence of these loan sharks in 90’s. The people who lost their credibility in eyes of legal supervisions of loan sanctions, were unemployed or had low image; thus relied on the mercy of loan sharks who’s conduct was comparatively informal from the salary lenders or the legal loan lenders, this informality included less asset recognition and paperwork that was a relief for the customer. This all though seemed pretty acceptable initially but brought disturbing consequences to them. The threats from the lender and the terror of being victimized by their violence were no less than a pain. Threats about violence are rarely applied practically but the tough time they put the customer through was what these threats were actually meant for. Any injury or harm to the customer means that he becomes functionally impaired and couldn’t work to pay back his debts t the loan shark. So precisely the violence threats were just bluffs and soon enough the customers realized it too. Mafia was the backbone for conducting these violent loan lending. Mostly the loan sharks were the bootleggers, quested for the work line after their prohibition period.
In United States and Canada, most of the loan shark victims were the gamblers. Gambling had been running in the society since start of times and has been common in all social classes. This is one of the reasons for the gamblers to sanction the loan amounts at high rate. Gamblers have contributed a lot to the loan shark credibility in the financial market.
The revealed statistics show that in the United Kingdom about 165,000 to 200,000 people are indebted to these loan sharks. Though according to the law policies the violence conducted by the loan sharks is considered a high-level crime. Still the exponential increase has been observed from initial 90’s to the present time.
Once we draw a vivid concept of what basically a loan shark is, we realize that none of the policy enforcement and clear out this sort of creditor in a one way go. There will exist a loan shark of one type or the other. Since the time they have progressed at high rate so more the time is needed to wipe them of and amen the financial policies of loan lending with incentives provided to the customers.
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