Sharing her views on why "loan sharks" still attract borrowers, SMU Associate Professor of Finance (Education) Mandy Tham noted that as legal lending requires the credit assessment of the borrower, it is less accessible to “subprime borrowers” whose credit assessment may not meet the loan requirements. “When one could not meet the credit assessment of legal lenders, one has no choice but to borrow from loan sharks as a last resort, especially after exhausting friends and families,” said Assoc Prof Tham. SMU Associate Professor of Sociology Alwyn Lim said, “Illegal money lending indicates to us that in this society, there is much more of a demand for liquidity than actually exists, that is, things seem to need a lot of money. As long as the demand for liquidity exceeds the supply, there will be an illegal industry that forms around it. If our society wants to tackle that, we have to get to the roots of what is causing that.”
