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Private money lenders lead to trouble, but moai thrives

Date Posted: 2007-09-27

Okinawans don’t go to the bank when they need money; instead, they turn to a unique private loan system called "moai."

Moai’s are informally operated by a group of people who know and trust each other, often without any paperwork and security checks required by banks and commercial loan institutions.

Private loan businesses typically don’t ask for paperwork, but charge high interest rates in exchange.

The problem is attracting attention of the Prefecture’s Life Section, which has published a notice, Sarakin-Gyo, about Okinawa being the top private loans business prefecture in the nation.

The Life Section says there are ten times more private loan services in Okinawa than the national average. The concern is that Okinawans aren’t using banks, but instead seeking money from private services who charge very high interest rates users often can’t pay. The Prefecture has fielded a Sarakin Complaint Counsel Section, which received more than 1,400 calls this past year.

“Loan business people call home late at night,” said one caller, “and I can’t sleep.” Another said “Loan business people are asking for too much interest. Please help.”

Government rules adopted last year require that loan businesses cannot charge high interest rates, but that hasn’t stopped many of them from doing so. Okinawa Prefecture officials say local companies, who have difficulty obtaining money from banks because of their small size, are secretly going to the private loan services.

Individuals are finding the moai, where groups of people band together and regularly contribute money to a central pool, then take turns taking the money out, a better solution to the expensive private loan services.

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