Cash Flow for the Poor?

[Arizona Kid]

My GF started a 5-6 business 2 and a half years ago just to keep herself busy. Started with 10k and now has around 100k lent out. Mostly the tricycle drivers around our house and sorry sorry stores. Sometimes takes a motor or gold as collateral. She gives much more time for payback and seldom has problems. Her only mistake so far was a bakery owners son who had been a reliable customer borrowed 30k and lost it gambling. He kinda just disappeared. After months of trying to collect from his mom she went to the police station to file a complaint. Lo and behold one of the officers there was someone that I used to drink beer with. He went to the bakery and the mom agreed to pay P700 per week. The loan is just over halfway paid back now. I told her that she should make a contribution to the next police xmas party.   

[manofthecoldland]

2 hours ago, Arizona Kid said:

My GF started a 5-6 business 2 and a half years ago just to keep herself busy. Started with 10k and now has around 100k lent out. Mostly the tricycle drivers around our house and sorry sorry stores. Sometimes takes a motor or gold as collateral. She gives much more time for payback and seldom has problems. Her only mistake so far was a bakery owners son who had been a reliable customer borrowed 30k and lost it gambling. He kinda just disappeared. After months of trying to collect from his mom she went to the police station to file a complaint. Lo and behold one of the officers there was someone that I used to drink beer with. He went to the bakery and the mom agreed to pay P700 per week. The loan is just over halfway paid back now. I told her that she should make a contribution to the next police xmas party.

Interesting. 

My wife would also get bored when I was out of country and likes to stay busy. I could afford it at the time, so I usually agreed to staking her in her 'business' ventures. They were all learning experiences. Some adventures and some misadventures. Most a mixture of both.  I pretty much knew I would never see my money again ( she did not disappoint me in that regard ), but she did use whatever money she made for her daughter's education.  Put her through nursing college here, sent her to older sister (also a nurse) in Sydney for Aus. certification studies and nursing work.  Now in medical school. Thank God, I'm not on the financial hook for that !  Ako mahirap.

When my step daughter was 11  my wife would try anything to give her the best education possible through her own efforts. She didn't want to use my money but fund it herself.  She saw it as her personal responsibility. At one point she tried the 5/6.

For Filipinos who don't mind occasional reality drama and can avoid most of the potential risks to health. wealth and peace of mind..... they might want to try it. It takes a certain type of personality to go this route, I would think, with  good social  skills, business sense and accounting ability.   Also the bravery to confront others when necessary, and override the SIR social norms.

My wife here is a warrior woman and she gave the 5/6 loan business a whirl twelve or so years ago. Didn't last long since I put an end it. Or shall I say, we mutually agreed that it wasn't worth the trouble collecting money or repossessing pledged security collateral items and dealing with deadbeats or simply people who preferred to buy rice and fish to stay alive on rather than retire incurred debt, despite earnest promises made and signed to in times of stressful need and desperation.

I recall that near the end of that run, I came back in country to find an extra refrigerator in the house. I listened to her tale of how she repo'd it with the help of the barangay captain and his council aides, confronting the upper class seaman's wife with the promissory note, etc. Despite extra time given, the woman didn't want to give it up. It was loaded onto the back of a rented jeepney and brought to my rental house in our subdivision and was now ours. I told her to sell it ASAP,  but before that happened, her not so bright teen nieces, who never had electricity in their house, decide to help the defrost process along by chipping the ice off the compartment with sharp pointed knives.... puncturing the freon tubes in multiple places and destroying the thing.   I told her to drop the business.

As usual, her adventure started while I was out of country..... like her business ventures into:  running a small hometown carenderia ( lasted 2 months  due to friends and relatives who ate but didn't pay) ,  fish pond leasing ( 3 harvest cycles until the leaser thought we were making actual profit and raised the leasing cost),.... or the multi-cab route franchise venture  (2 years).... or the small piggery (3 years).  They all made money.... on a Filipino small business level, which often translates into small profit on considerable investments of money, labor and time. 

Finally she got a regular job with SSS and Philhealth benefits and finished funding daughter's education.

 I'm not a fan of having a wife or GF running a 5/6 loan business primarily because the expat is put at risk. People may think that the money is coming from the expat, not the Pinay wife or GF's own capital. Few people feel endearment to their creditors, despite voluntarily using them for their own needs. If there is unwarranted resentment in times of emotional anguish over the debt trap they put themselves into, do you think they will logically take self-responsibility for their predicament ?   If they are angry or temporarily imbalanced with alcohol, who do you think they are more apt to lash out at if it comes to that...... a local  fellow neighborhood Pinoy or Pinay.... or the foreigner who they think might be their true creditor behind the wife or GF they are doing business with ?  Just a thought. 

My Aussie friend here, whose wife is in the business isn't bothered by this. I was. He often has motorcycles in his yard, awaiting repayment for loans. His wife, like mine, is middle aged and has been doing business for quite a while, but she is a respected landowner, small businesswoman and clan matriarch. That does give him some protection.

I think the only time I truly resent an honest businessman 5/6 operator is when I have the bad luck of falling into an ATM line at a bank when they are processing all their collateralized client ATM cards for their collection withdrawls. It takes a very long time, but it is interesting watching them stuff the wads of dispensed cash into their pockets when standing outside. LOL

[Gary D]

I was told that the local Indian population are heavily into the 5/6 business and the mortality rate is quite high. Credits are the death of most sari sari stores and if you don't offer credit you don't get business.

A relation of my wife's mother would run up large credits at the local store and leave for the daughter when she visited. Of course the store knew the debt was good because the daugther was married to a rich foreigner and lived abroad.

[Jollygoodfellow]

3 hours ago, Gary D said:

I was told that the local Indian population are heavily into the 5/6 business and the mortality rate is quite high. Credits are the death of most sari sari stores and if you don't offer credit you don't get business

Yes it is. Somewhere here l posted many times of another India shot dead from a lending business. 

[Mike J]

22 hours ago, Jack Peterson said:

Let’s look at the 5 most common reasons cited by Filipinos for not saving, and, if it applies to you, we also share the steps you can take to address this.******

In my opinion there are two reasons not on the list that could should be near or at the top.

The expectation of family/friends/neighbors that if you have "extra" money it should be shared.  There is always someone who is sick, someone who requires tuition, someone who has died, someone getting married, a church that needs a new something.  It is like the Philippine culture tends to drag down those who achieve some measure of financial success.

What is important and what are the  priorities.   What happens to the 13th month wage?  Does it go into savings or does it go to buy fireworks?  So often it seems that anytime a family would have a little extra money it has to go for some type of celebration.  The 13th month is probably the best example of the "enjoy life now instead of save for the future". 

I think that reason number two is related to reason one.  The thought being that it is better to spend and have fun before someone wants to borrow! 

 

 

[hk blues]

20 hours ago, stevewool said:

Do you always get back what you loan out .

Yes, we do.  And if we didn't the loss would be minimal and it would be the 1st and last time it happened.  

[Arizona Kid]

On 4/2/2019 at 11:40 PM, Gary D said:

I was told that the local Indian population are heavily into the 5/6 business and the mortality rate is quite high. Credits are the death of most sari sari stores and if you don't offer credit you don't get business.

A relation of my wife's mother would run up large credits at the local store and leave for the daughter when she visited. Of course the store knew the debt was good because the daugther was married to a rich foreigner and lived abroad.

I was told that my GF might be a target as a 5-6 person. Won't happen as she has a very small business. The Indian guys you are talking about that get killed have hundreds of thousands of pesos loaned out. If a person owes say 50k, It's cheaper to pay someone 20k to take them out.

[hk blues]

4 hours ago, Arizona Kid said:

 It's cheaper to pay someone 20k to take them out.

Must be an expensive place you're taking them! 

[bastonjock]

On 4/2/2019 at 7:47 PM, Jollygoodfellow said:

Yes it is. Somewhere here l posted many times of another India shot dead from a lending business. 

I remember reading an article about foreigners getting murdered in mindanao , I'd estimate that 80 % of them were Indian money lenders

[usa32]

Don't take this the wrong way to the people that do.

But if you don't have the income to take care of you,your wife and/or kids in the Philippines and have to resort to either you or your wife/gf putting money out on the street/lending. Which we all know opens up you and your family to bodily harm. Then you shouldn't really be in the Philippines.

just my opinion