|Loan sharks fuel Japan's suicide rise
Justin McCurry, Osaka
Sunday August 17, 2003
A quick, easy loan of less than £100 must have seemed the answer to Akiyo
Nishihira's prayers. In debt to several consumer loan firms, the
69-year-old housewife knew there was nowhere else she could go for cash to
pay her ailing husband's and brother's medical bills and the rent on her
council flat in the Osaka suburbs.
Interest, the Tokyo loan shark told her, would amount to a modest 2,000
yen (£10.50) if she paid up quickly. She had no inkling that within a
month, she would be asked to pay 50 times that amount, eventually becoming
trapped in a vicious circle of borrowing from one loan shark to pay back
Three months later, Nishihira's options had run out. Late one night she,
her 61-year-old husband Katsuyuki, and her brother Masayoshi Kawasaki, 81,
huddled together on the track at a railway crossing near their home.
Shortly after midnight, their personal hell ended when they were struck
and killed by an oncoming train.
Their story is typical of the growing number of Japanese who are falling
prey to unscrupulous moneylenders. Helped by a 10-year-old recession
during which bankruptcies have more than quadrupled, the loan sharks have
moved in for the kill.
In the first six months of this year, more than 166,000 people were duped
by loan sharks - 40,000 more than in the whole of last year - according to
the National Police Agency. So far they have paid out more than 17 billion
yen (£90 million), already exceeding the 16 billion yen total for all of
2002. Experts believe the real number of victims is around a million.
The yakuza, Japan's mafia, is thought to be involved in about a quarter of
loan shark operations. Organised crime's tightening grip on the industry
was underlined last week by the arrest of Susumu Kajiyama, a former
gangster who earned the nickname of 'the loan shark king' for allegedly
running a 1,000-strong network of loan sharks whose profits were passed on
to the Yamaguchi-gumi, the country's most powerful crime syndicate.
Hours after he turned himself in to police in Tokyo, riot police raided
the headquarters of Goryo-kai, a smaller gang whose boss is suspected of
helping Kajiyama siphon off tens of billions of yen from loan deals for
the mafia in three years.
Loan sharks employ a mixture of friendly repartee and, later, threats and
intimidation to ensnare the vulnerable and gullible.
When borrowers fail to keep up repayments, their names go on blacklists,
which are sold on to sharks. Telephone calls follow, typically offering
modest sums in return for nothing more than the names and addresses of a
few guarantors, often relatives or neighbours. But they soon find
themselves paying annual interest well in excess of the 29 per cent legal
Police said Kajiyama's ring charged between 27 and 380 times the legal
limit. Annual interest of up to 10,000 per cent have been reported.
Last year, a record 7,940 Japanese killed themselves because of financial
worries, 1,000 more than in 2001. When Mrs Nishihira visited her local
police station for help, she was told to stop paying off her loan debts.
But, despite police warnings, her loan sharks issued threats right up
until she died.
Public horror at the triple suicide is forcing the government to
fast-track tougher laws against usurers, entitling borrowers to cease
repayments if they are charged more than 109.5 per cent interest, but they
must still pay the principal on their original loan.