North Korean loan sharks typically
lend out bundles of 10,000 Chinese yuan notes to borrowers. Image: Daily NK
Reports of violence are increasing in North Korea as loan sharks turn to drastic measures to collect their debts. Many are reportedly finding it difficult to repay their personal money lenders as recent sanctions and other factors have led to economic difficulties. Heated disputes are expected to rise as the end of the year approaches.
A source in North Hamgyong Province informed Daily NK on November 27 that “arguments between loan sharks and borrowers are a common sight in the markets and in villages these days. In cases where it seems the borrower will not be able to pay, it’s common for the lender to resort to violence.”
The source also spoke of a recent incident in Musan where a person was beaten and their livestock and television taken from their home after they could not pay back their loans in time. They allegedly borrowed 100 kg of flour and 10,000 Chinese yuan from a lender in Chongjin this past summer.
“The person was first introduced to the lender through a relative in Chongjin. The lender also started a conflict with the relative who introduced them, because that person also had a house to their name. The borrower is a man working in the Musan ore mines who apparently had planned to smuggle and sell iron ore to repay the loan, but conditions did not allow this to happen this year,” he added.
The problem is not isolated to rural villages, however, as the source describes how “even those in the cities who fail to pay back loans or interest on loans are being pursued by lenders. The situation is usually more violent in the cities, where lenders mobilize gangs to go out to collect or punish borrowers.”
Multiple sources confirm that these cases have become common across the entire country. One source in Ryanggang Province also told of the suffering of locals at the hands of violent loan sharks who are trying to settle their accounts before the end of the year. People are being harassed daily, with collectors staking out the homes of borrowers, keeping track of their movements, and threatening them if they do not pay their loans or interest.
A separate source in Ryanggang Province relayed a story from Hyesan in the beginning of November, where “a resident who could not pay their loan was forced to flee their home. Collectors harassed them and told them they had to report their location at all times, as they did not believe they would be able to collect.” This eventually led the person to run away.
She reiterated the connection between the recent increase in violent incidents and the end of the “fiscal year” where loan sharks are trying to close out more accounts than usual. The strengthening of international sanctions and a poor harvest this fall are also being cited as reasons for the sudden urgency.