TOUGHER punishment against loan sharks is the best way to reduce the growing problem of usury in Slovakia, said Deputy PM for Minorities Pál Csáky in reaction to a special report addressing the issue.
The report, which was discussed in parliament last week, offered solutions to a problem that is particularly blighting the Roma community in the republic.
The majority of Slovak Roma, estimated between 350,00-500,000, live below the poverty line and suffer high rates of unemployment.
Roma families with children are soft targets for loan sharks, who prey on low-income households in urgent need of money. Once parents agree to borrow cash from lenders at high interest rates, they quickly get into a cycle of escalating debt. According to the report, the usurers later take advantage of the weak math skills of some Roma, and twist up the rate of interest owed.
"This has always been a problem most acute among the poorest people, with usurers exploiting their vulnerability to get rich. That is why Roma are now the victims of these loan sharks," said Ladislav Fizik, head of the non-governmental organisation, the Roma Parliament.
"When a family, which has five or six children is hungry and cold, money must be secured somehow. These people are faced with a dilemma - you either steal or you go to the usurer and accept his conditions," Fizik said.
According to the report, tens of millions of crowns that the state provides in social benefits have been funnelled to the usurers over the last decade.
Police maintain that the victims often fail to contact the authorities, fearing the revenge of the usurers. Police statistics show that since 1993 loan sharks have corrupted Sk12 million (€300.000). But experts claim that the figure does not represent a tenth of the real damage usury has caused.
Klára Orgovánová, the cabinet's plenipotentiary for Roma communities, proposed that police specialists should be trained to work among the Roma communities to gain more information about the problem of loan sharking and help the victims take their abusers to court.
"Some usurers have been operating for years, and everyone knows their identity and what they are doing, but no one reports it to the police." Orgovánová said.
The cabinet's report also proposes that suspected usurers are investigated in custody so that they cannot influence the victims and witnesses.
Deputy PM Csáky also calls for harsher punishment.
"Such people must be punished with exemplary penalties," he said.
According to Csáky usury is "highly immoral" and "such practice cannot be tolerated at all in our state".
Justice Minister Daniel Lipšic said he was open to the possibility of strengthening the punishment for usury and added that MPs could propose harsher penalties at the forthcoming discussion of the re-codification of the country's Criminal Code scheduled for October.
In the first quarter of this year police recorded 99 cases of usury, more than all registered cases throughout the previous two years.
Interior Minister Palko said that while in 2001 only 17 cases of usury were clarified leading to concrete indictments, in 2003 the figure increased to 42 cases. Since the start of this year the number has already reached 94. But because witnesses feared to testify in court against their abusers, only 85 people were sentenced for usury between 1993 and 2003.
According to Fizik, tougher punishment is a positive step to start dealing with the problem, but that more must be done to cut down the usurers' source of income.
"Repression is fine, but there also must be some preventive measures. Roma need better education to enable them to become competitive on the job market. They need work so they can get out of the poverty trap," he said, adding that the cabinet's report on usury was a "good first step" in the fight against the problem.
Unless these measures are taken, Fizik believes usury will remain a problem that plagues the community.
"When people find themselves in a [financially] critical situation they have to find ways to survive. And in such cases they are willing to borrow money even at 100 percent interest rates," he said.
Excerpts from the cabinet analysis on usury:
* The worst impact [of usury] is among children, where it effects an overall worsening of children's health, and adversely influences their educational process.
* Children from families exploited by usurers attend school hungry and badly dressed, and are constantly weak and tired. Often they sleep through classes and teachers are unable to help them.
* Collection of debts in the majority of cases takes place on the day when the state pays social benefits. The Roma who owe money must give, often under the threat of physical violence, their entire finances leaving them with no money to live on. Consequently they cannot afford to buy goods in regular shops and are forced to turn again to the usurers.
* If Roma who are in debt are unable to pay off the money they owe to the usurer, other family members become liable. In this case, the usurers take advantage of the Roma mentality and their strong family ties.
* Usurers who are active in towns target families who draw maternity benefits and other social benefits through automatic deposits into bank accounts. In such cases loan sharks force those families to open bank accounts, then take their bankcards, to extract money at will.
4. Oct 2004 at 0:00 | Martina Jurinová