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Apr 2, 2011
Students in China easy prey for loan sharks

They are lured into illegal betting, then encouraged to borrow when in need of cash
By Jason Ou

THEIR teenage daughter used to be outgoing and well-behaved.

Then her friends introduced her to sports betting. Before long, the cheerful student became withdrawn as the gambling bug took hold. Worse, when she ran out of money, she borrowed from loan sharks to feed her habit.

The 15-year-old has now run up debts amounting to several thousand yuan, according to her parents who posted the story of her descent into gambling hell and its impact on the family on the Internet.

In their March 8 post on the popular Tianya forum, the couple from Hainan island recounted how their daughter had fallen prey to loan sharks who also harassed the family for money, and appealed to the government to crack down on such harmful activities.

The couple's story turned the spotlight on illegal moneylenders and sparked angry responses on the Internet.

'School loan-sharking surfaced a long time ago and has been running rife. How come the government just remains apathetic?' asked one netizen.

The girl's experience is not an isolated case. Illegal moneylending activities in Chinese schools - often intertwined with sports betting - are becoming increasingly common across the country. Apart from Hainan, similar cases have been reported in Zhejiang, Guangdong and Jiangsu provinces.

Mr Chen Yihai, a senior official at Hainan's Wenchang Middle School, where the girl is a student, told the China Education Daily that loan sharks would first lure students into illegal betting and then encourage them to borrow when they need money.

Football and the American NBA basketball league are popular among students, many of whom can place a bet easily using their mobile phones.

A bet starts from 50 yuan (S$9.60) but can go up to a few thousand yuan, according to a student who was a bookmaker before.

In a sign of how prevalent illegal gambling is in China, Dingcheng - a small town with a population of 60,000 in Hainan - has at least 17 illegal football betting outlets.

The operators make it easy for students to gamble by hiring other students or school employees to take bets or lend money in schools.

According to Sanqin Daily, the loan sharks work this way: They entice first-timers by allowing them to place a bet for free. After getting their first taste of gambling, the youngsters may continue, using their own money. When they run out of funds, the loan sharks step in to lend them money, charging exorbitant interest rates. If the debtors fail to pay up, runners hound them or turn up at their homes to harass their family members.

This was exactly the predicament the girl's parents found themselves in, which prompted them to share their story on the Internet.

They said their daughter borrowed small sums of money which totalled 1,600 yuan, but was forced to pay back 5,000 yuan, more than three times the original amount.

There is often very little recourse for parents whose children are victims of loan sharks. The police cannot take action unless the adults can prove that their children have somehow been tricked into gambling or borrowing money at high interest rates.

The girls' parents said in the post that her IOUs did not specify the interest rate, only the total amount to be repaid.

'It poses many difficulties if the students involved are unable to provide valid evidence,' a policeman investigating school loan-sharking said in an interview in the Nanguo Metropolis Daily.

Mr Chen, the school official, said schools cannot do much to help because students usually hide their illegal activities from the school authorities.

Explaining why they went public with their story, the couple said they did not want other children and their families to suffer the same fate.

'As the victim's parents, we fervently hope that the authorities will come up with measures to severely punish school loan sharks and preserve the tranquillity of the schools. Only then can our children be protected, focus on their studies and live happily,' they wrote.

'Dear parents, let's save our next generation!'