Beat The Scroungers: A Survival Strategy
In this country, persistent requests for loans are a fact of life. Those of us who have enjoyed a relatively sheltered western upbringing may be unsure about how to react. Having been burned a couple of times in the past, I have learnt from bitter experience that there is a right way and a wrong way to handle this and now have a more informed approach. In short, one must do as the locals do.
The author of the reader's letter 'Never enough – the Thai family adventure' complained that members of his new Thai wife's family borrowed large sums of money from him and failed to repay. No surprise there.
But then it gets interesting. He describes her former Chinese husband as a 'cheap bastard' for insisting that his loan to the family was secured by a mortgage. But think about it. This Chinese guy did a (grudging?) favour for the family whilst ensuring that they treated him with respect. He also got his money back. The story is so instructive that it prompted me to write this piece.
As 'wealthy' foreigners, we are frequently under pressure to lend. This is a real minefield. The recipients will not love or respect you for it. They will avoid you. Later, they will hate you. You will grow to hate them. Friendships and family unity will suffer along with your bank balance. So what should you do when asked?
Reject requests immediately with a firm but polite 'no'. You don't have to get angry or make excuses. If pressed, just say that you don't want to lend and that you are not prepared to discuss the matter further. Don't be vague or say that you will think about it. This will be interpreted as a deferred 'yes'. Once expectations are raised, a late refusal will cause additional distress. Be aware that your tormentor will choose their moment carefully. Drunken revelry, post-coital bliss, night-time phone calls and family gatherings are perfect opportunities. Be ready.
Don't be a sucker. 'Friends' who freeze you out when you turn down their loan requests were never your friends. Exposing them is probably a good thing. However, situations may arise where you want to be generous to an attractive woman for rather predictable reasons. Gifts are fine but lending is a different matter altogether. Bankers call this 'groin lending' and are instructed to avoid it. You should do the same. Regarding loans to prostitutes and their families, there is no point in stating the bloody obvious. If you are related to your tormentor by marriage, then this could be your wake-up call.
If you must lend, remember that you are in charge. Don't be rushed. Make a detailed plan in advance and stick to it. Dictate your terms and include a repayment plan. Consider penalties. If you have to negotiate, then make concessions slowly. The loan-shark interest rate here is typically about 10% per month and is paid monthly. Charging interest could make the arrangement worth your while or, better still, could dampen the recipient's enthusiasm to borrow from you.
Secure the loan. If this seems too business-like, just bear in mind that you will almost certainly clash with the recipient later. Cover your losses now. Subjecting yourself to future sleepless nights fuelled by angry fantasies about 'sending the boys round' is not healthy. For large sums, consult your lawyer. Bear in mind that repossessing a house or land by legal means is very difficult here. For small sums, hold onto their gold/cellphone/motorbike etc. Prepare a loan agreement and make sure that the recipient hands over any relevant purchase receipts or transfer documents. Reject property that you suspect is stolen or borrowed. Only accept what you want or can sell. Let's face it; you will probably be the owner soon. Don't even think about unsecured lending. The money will be regarded as a lovely gift. You will be regarded as an unlovely buffalo.
Generosity is a virtue but don't confuse it with lending. In a family situation, giving may be more appropriate. Giving a small amount may reduce any moral obligation that you may feel to lend a larger amount. This will save you money. You will still be regarded as a buffalo but at least you may get some peace.
This approach applies equally to lending to westerners. English teachers please take note. There is, however, one exception. If you know some persistent pain-in-the-arse farang who you desperately want to shake off, just lend him a few thousand baht and then get ready to enjoy his subsequent disappearance from your life. A small price to pay!