PSA Cracks Down on Loan Sharks

Shenyang, China — North Korea’s police, the People’s Safety Agency (PSA), have launched a special investigation into the behavior of loan sharks, or “usurers,” in light of the high numbers of people taking out high interest loans but being unable to keep up repayments and ending up as “kotjebi.”

A source from Shinuiju told Daily NK on Friday, “A decree declaring all-out war against predatory usurers has been handed down to the provincial People’s Safety Agency. They are investigating Korean-Chinese traders and North Koreans repatriated from Japan.”

Loan sharks in North Korea are generally Korean-Chinese with relatives in China or those who have returned from Japan but whose relatives remain there.

The story was confirmed by a source from Hoiryeong in North Hamkyung Province. The source explained to Daily NK on Thursday, “The People’s Safety Agency issued a decree exposing the usury, and conveyed it to every office of the provincial and municipal National Security Agency (NSA) and the PSA. Thereafter, NSA officials attended People’s Unit meetings and gave lectures about harshly sanctioning the practice of earning money through high interest loans.”

According to the Hoiryeong source, the decree, “Map out measures to uproot usury,” was delivered to all NSA officials on September 2.

The decree apparently says, “Although national measures have been adopted to root out usury, this social phenomenon has not been eradicated.”

The Shinuiju source said that the authorities’ new hard-line has come about because the numbers of people who are being turned into “kotjebi” by these predatory loans is increasing.

He noted, “Since 2000, new kotjebi have been people who have gone to ruin and lost their homes to loan sharks. These days their numbers are drastically increasing, so the authorities cannot stand by indifferently.”

According to one source, a Korean-Chinese loan shark called Cho Jung Cheol was recently caught by the PSA on suspicion of taking a total of seven houses from defaulters.

North Korean people usually offer their house as security on a loan. Cho lent money at 30% interest for two weeks to a month, and used gangsters to take houses from those who couldn’t pay.

Those who lose their houses in this way roam the streets with their family members, the family splits up, or sometimes they escape from North Korea. After 2005, this became a common social phenomenon.

The loan sharks have other unethical ways to turn a profit, “Some of these loan sharks hoard up food during the harvest season and earn undue profits from selling it in the difficult spring season,” the source explained.

Sources all agreed that the people unanimously welcome the authorities’ measures.

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