Newspaper article The Christian Science Monitor

Italians Fall Victim to Extortionate Loan Practices as Recession Bites Some Victims of Usury Pay as Much as 1,000 Percent Annual Interest

Newspaper article The Christian Science Monitor

Italians Fall Victim to Extortionate Loan Practices as Recession Bites Some Victims of Usury Pay as Much as 1,000 Percent Annual Interest

Article excerpt

LAW enforcement agencies, businessmen's associations, clergy, and the press are making common cause on loan sharks, who are flourishing throughout Italy these days.

Usury has reached staggering proportions in the last couple of years, with an estimated turnover of 5 trillion lira ($3.2 billion). At least 8,000 usurers are said to be holding more than 4 million Italians hostage to loans made at annual interest rates from 100 percent to 500 percent.

"This crime is very widespread, not only in Rome but throughout Italy," says Angiolo Marroni, president of the Crime Commission of the Lazio region, in which Rome is located.

Conservative banking practices, a recession that has Italians worried about the future, and the resultant collapse of consumer spending and of liquidity figure prominently among the causes of the problem, experts say.

In many cases, small businesses can't get banks to approve a loan, explains Vincenzo Alfonsi, the Rome secretary of the Confesercenti small businessmen's association. Banks often ask for between five and 10 times the amount of the loan as collateral, he says, "and not everyone can offer these guarantees."

Nor, he adds, do they always feel they can wait the four to six months it can take for a normal credit application to be approved, especially when loan sharks - who appear to the businessmen, at this point, as practically their saviors - can provide the desired money the same day.

About 15 percent of Rome's small businesses have fallen prey to loan sharks, Mr. Alfonsi says.

The phenomenon takes a devastating human toll. Recipients of the loans are made to feel guilty when they cannot pay. Rather than perceiving themselves as victims, they feel they are not holding up their end of a contract.

"The only way to get out of it is to report it to the police, but often they're afraid," says Alfonsi, whose Confesercenti organization runs a hot line that victims can call for counseling. "I received the latest call yesterday. A man said: `I'm afraid to report it. I've left Italy with my family.' "

In other cases, a woman prostituted herself and a young Neapolitan disc jockey put an advertisement in the newspaper to sell a kidney in order to meet their payments. …

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