Napawan Rimwaan ​​used a phone app to borrow 2,000 baht (US$55), thinking it was an interest-free loan she could repay in 90 days.

A week later, a loan agency officer began calling and threatening the Thai mother-of-two to repay the loan – with 31% interest – within seven days.

“I just wanted to buy a school uniform for my kid,” Napawan, 38, told BenarNews, unable to hold back tears. “Now my children will have to eat rice with just sauce.”

These were not the terms Napawan said he agreed to, a telltale sign of the type of illegal money-lending services that have flourished across Thailand and exploited cash-strapped people during the COVID-19 pandemic. 19, according to Thai police. The authorities, who have cracked down on these illegal loan operations, believe that these criminal enterprises have earned millions of baht from unsuspecting customers.

After loan officers called Napawan more than 10 times a day, she called a police hotline.

“The police told me to calm down, saying they [the loan sharks] couldn’t hurt me,” Napawan recalled, noting that she had just recovered from COVID-19.

As the pandemic spread across Thailand, many fell prey to such illegal operations because they lacked access to legitimate loans during difficult times, a senior police investigator said.

“The pandemic has affected all businesses, from street vendors to small and medium-sized businesses. Many businesses have frozen or closed,” said Col. Padol Chandon, superintendent of the national police’s Economic Crime Suppression Division (ECD).

“When the country eased the lockdown, everyone started looking for funds to restore their business, and the loan sharks were ready to attack,” he told BenarNews.

Online money loans, including smartphone app-based services, replaced traditional bank loans for many people, as they offered easy approval without proper documents or credit checks. For some of the victims, it only took them a few minutes to borrow a few thousand baht.

“That’s why the interest rate is very high,” Padol said, adding that lenders know what they are doing is illegal.

From January to June, authorities arrested nearly 100 people suspected of links to illegal loan syndicates, according to the ECD.

In July, the department cracked down on the largest syndicate, arresting nearly 40 suspects identified as members of three networks in the northeastern provinces of Maha Sarakham, Roi-Et and Kalasin. Police said the syndicate was led by Sawek Manpan, 43, a former debt collector who had been arrested and jailed five years earlier on similar charges.

A month earlier, a police task force cracked down on the biggest loan sharking website, when they arrested 29 suspects from five rings in the provinces of Bangkok, Chanthaburi, Khon Kaen, Pathum Thani and Nakhon Ratchasima.

Padol identified the mastermind behind the website-based network as 26-year-old Aniwat Buayai, who started her business just two years ago with around 200,000 baht ($5,460).

ECD investigators allege that Aniwat began by lending money to poor street vendors who demanded a few thousand baht. Later, he expanded his business to target small and medium-sized business owners who needed 100,000 to 2 million baht ($2,731 to $54,630) within days to keep their pandemic-hit businesses afloat. , police said.

Aniwat allegedly hired “rogue young men” to work as debt collectors offering them free housing, cars and big commissions on the money they collected, police said.

When police arrested him, Padol said they found around 500 million baht ($13.6 million) in Aniwat’s bank account.

“He confessed that he learned how to deal with loan sharking activity from social media. It’s copycat behavior,” Padol told BenarNews. “It’s a high-risk, high-reward game.”

Aniwat and Sawek face a series of criminal charges, including operating illegal money lending services and providing personal loans at exorbitant rates. Additionally, Sawek and his gang have been accused of collecting debts through the use of intimidation and violence.

In June 2020, three months into Thailand’s COVID-19 lockdown, the Royal Thai Police set up the Moneylender Abuse Center after receiving increasing complaints from victims reporting physical intimidation.

So far, the police have investigated more than 7,000 cases. The centre’s hotline received around 4,000 calls a month for eight months ending in June, but was only able to respond to a quarter of them due to lack of resources.

Yet police arrested 833 suspected loan sharks in those eight months, froze 254 bank accounts, seized hundreds of cars and motorbikes and seized 1.49 million baht ($49,780) in cash. The center estimated the value of the confiscated assets at more than 31 million baht ($852,600).

Authorities said several suicides have been attributed to threats from loan sharks over the past two years.

“I’m sorry. I’m tired. Don’t pay the loan shark. They’ve already made too much money from excessive interest rates,” reads a handwritten suicide note left by a bread factory owner who s committed suicide in May.

“I fear for my daughter’s safety”

Not all victims contact the police.

A Thai social activist told BenarNews that his team receives about 10 loan-related complaints daily.

“They are increasing dramatically and debt collectors are using intimidation tactics and threats of violence, including attack on life, destruction of homes, seizure of property…and even shooting,” a said Eakpob Laungprasert, founder of the Facebook page Saimai Tong Rod, or Saimai. Must Survive, which helps people who have fallen on hard times after contracting COVID-19.

Recently, Eakpob took street vendor Jiraporn Thepabutra and her 8-year-old daughter to a police station after debt collectors blocked them from entering their home and sent life-threatening messages because she couldn’t pay a loan and interest after contracting COVID.

“Watch your back. You took our money; you will not live. Return the money now. Or I will burn your house down,” said a post seen by BenarNews.

Jiraporn, 44, said she had to pay 400 baht (about $11) a day on the 20,000 baht ($546), which she had borrowed at 60 percent monthly interest. The lender told her to borrow more money to pay off the debt when she said she couldn’t work because she was infected with COVID-19.

She said debt collectors send threatening text messages every day. They also hid around his house, knocked on his front door and threw small stones on his roof.

One night, Jiraporn and her daughter couldn’t get into their house because the debt collectors had super taped the keyholes on the door padlocks and stuck a sign on the door that read, “Give my money back.”

She said she sat in the street crying for nearly three hours before calling Eakpob for help.

“My loan application was rejected by the bank, so I decided to go to loan sharks because I had to pay the rent, my daughter’s school fees and some money to start my business again”, Jiraporn told reporters in Bangkok.

“I’m so scared they’ll attack me. I fear for my daughter’s safety,’ she said as tears streamed down her face. “I can’t live like this anymore. I don’t want to owe anyone anything. »

Eakpob said street vendors are the most vulnerable during the pandemic as they are informal workers and lack access to financial institutions.

His team negotiates with creditors on behalf of those debtors while working with the police to report possible crimes.

The government, Eakpob said, should set up emergency funds in every district during these difficult times.

“Funds should be easily accessible, approval should be quick and loans should have normal interest rates,” he said.

BenarNews is an information service affiliated with RFA.