Often students take loans to pay burgeoning fees of colleges, but students in China seem to be falling for another viable option to repay their predatory loans
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Impoverished young students, who cannot afford money for their college tuitions, daily expenses and sundries, are now facing an unpleasant reality in China.
Chinese e-commerce startups, well aware of these young people's vulnerable situation, are now offering something called 'naked loan services' to students who are looking for ways to supplement their income. It has become the only viable option for the impecunious students in the country, reports Vice Australia.
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According to the report, several online lenders are taking undue advantage of these young people desperate for disposable funds by demanding naked selfies as a form of collateral from these potential clients. Later the lenders threaten to leak their acquired selfies to the individual's family and friends if the loans are not repaid on time.
Many lenders even charge a high rate of interest on the original loan amount, thereby trapping the victims in more debt, and forcing them to send more pictures and videos. These kinds of services have become a growing trend in China.
In 2016, more than 161 young women, who have shared their nudes with their photo IDs with these money lenders, are now being trapped in the vicious racket, reports the state media outlet China Youth Daily.
The report further reveals that all the victims were aged between 19 and 23, who typically borrowed sums of money between USD 1,000 and USD 2,000. While others were reportedly given the option to do sex work in order to pay off their loan.
The issue of naked loan services in China has increased to the point that, last year, the country's financial regulators vowed to crack down on unlicensed micro-lenders, reports Reuters.
A multi-ministry task force was quoted in a statement "Amid the rapid development of cash loans—while they have played a role in meeting the normal credit needs of some groups—problems such as over-lending, repeat borrowing, improper collection, abnormally high-interest rates, and privacy violations have become prominent."
Although the country introduced new regulations and banned unlicensed organisations ( including individuals) from conducting a lending business, it had little effect on the vicious industry. As per local media in China, the industry is still thriving on social media.
However, it worth pointing out that China's now infamous "naked loan services" has not reached India yet. Services like SimplPay and LazyPay has only emerged here.
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