Loan sharks use money to lobby ruling parties
Non-bank money lenders are donating political funds to the ruling Liberal Democratic Party and Komei Party in order to push them into raising the maximum interest rate permitted on personal loans.
Victims organizations of loan sharks are severely criticizing this move on the grounds that the loan interest rate is already too high.
The group of non-bank loaning firms called Zenkinren, at a board meeting in November last year, decided to call for the upper limit on the annual interest rate to be increased from 29.2 at present to 34.675 percent.
The reason Zenkinren gave this raise was that the current interest rate can't ensure good profits for loan companies so that many of them would have to withdraw from the business to be replaced by true loan sharks.
A political organization Zenkinren established in November 2000 gave about 1.32 million yen (about 11,000 dollars) to the LDP and the Komei Party in 2001 as donations, party ticket fees, and subscription to the Komei Party newspaper.
A lawyer who is working to help loan shark victims said that the current upper limit of the consumer loan's annual interest rate is 29,200 times that of an ordinary bank deposit and that therefore the loan sharks' demand for increased interest rates is outrageous. (end)