Parents urged not to borrow money from unlicensed lenders


Parents have been urged not to borrow money from unlicensed lenders, with students getting ready to go back to school.
Finance company Fincorp’s chief executive officer Tony Witham told The National on Monday that licensed financial institutions overseen by the Bank of PNG, and similar to FinCorp, offered the best services to people looking for assistance with school fees during this time.
Heduru Moni (Moni Plus) Ltd, Women’s Micro Bank Ltd, Credit Corporation Finance Ltd and PNG Microfinance Ltd are some licensed lenders listed under BPNG.
“It is important that people do not get into the ‘debt rut cycle’,” Witham said.
“It is important that parents and guardians investigate their best options when borrowing money to either pay for school fees, books, uniforms or other items.”
Witham said that while it was important that children received the best education, “we must also try and live within our means and not get so far into debt that it effects our future”.
“Victims of unlicensed vendors will be paying back huge interests that can affect their borrowings in the future and even their credit marks,” he said.
Illegal loan providers use harassment, intimidation and threats of violence to recover debts.
They may also use illegal means to seize property to recover debts.
Daniel Maino, who will be sending two of his three children to school this year, said that although it was true that getting loans from unlicensed lenders had its disadvantages, people still go to them because they made borrowing “easy and quick”.
“In PNG, we have wantoks and visitors coming into our homes every now and then expecting some money before they leave,” he said.
“Unlicensed vendors provide a quick way to get rid of these liabilities.”