MicroSerfin - a false Robin Hood - stealing from the poorest of the poor

A few years ago I read about a guy in Bangladesh (I believe) who started to provide micro loans to the poor people. This enabled them to buy a bicycle or sewing machine or similar item, which made it possible for them to start a business providing a service, thus creating a doorway for them to put food on their table and support their family. I remember how excited I was about this idea. Oh how wonderful!

Now, Panama is not as poor as Bangladesh, but there are many people here who survive on jobs that are paying 12 $ a day (sometimes even less), and sometimes are not even providing work every day of the week. With such a dismal income, paying 30$ +/- per year for a bank account is way too expensive, of course. So most of the poorer people have no bank account - and there's quite a large number of people who fall into this category!

Without bank account, however, it is completely impossible to get a bank loan. Heck, if you're not able to bring proof of a fixed income, you can't open a bank account at most of the banks. A bank loan is just not an available option when somebody is in such position.

But, just like in Bangladesh, there are organizations in Panama, too, who are "helping" such people. Or at least they say so...

One of them is called BBVA MicroFinanzas - the parent of MicroSerfin.

Unfortunately, however, this company is engaging in predatory lending practices!

A friend of mine took a loan from them a few years ago. She made her payments in time all the time, and generally was a good borrower. When making her payment in October she got a receipt showing 1587$ as open amount. 

10th of November - total amount owed: 1,587$

In November I paid 1,500$ on her account - through online banking. 

7th of November, my payment - one month after total amount showed 1,587$

The amount was credited. However, when she tried to get a receipt, they told her that it is not possible. Instead they gave her a printout showing the 1,500$ of November registered as prepaid monthly payments for the next 10 months. I didn't think much about it, yet, and suggested that once she has the money to pay the remaining less than 100$, it will all be well.

Yeah right! When she was trying to pay the remaining amount in December (7th), she was told she owed about 500$!

She asked me how is this possible. I advised her to simply pay 10$ onto the account to get a receipt, which she then did, here is that receipt.

When we met again she showed me the receipts, and I couldn't believe my eyes! How could 1 month of owing 1587$ plus 1 month of 1,500$ less incur 400$ in interest? That's 25% interest per month! Or 300% interest per year!!!

7th of December - total owed showing as 400$ more. And a week later it's now up to 520$!

I decided to come with her to the office and try to figure out what's going on. By that time - a week later - the amount owed now was 35$ more again - up to 520$!!! (Look at handwritten note on bottom right.) Even if the 486 $ were right, that would be more than 7% of interest per week, or 350% per year!!!

I told them they are engaged in predatory lending practices, and gave my friend 80$ to pay the amount that is supposed to be open. They refused to take the 80$ but barraged her with explanations about why she's supposed to pay more, that the system is calculating this and the system is always right, and crap like this... I told my friend to not worry about any of their talk, just pay the 80$ and we'll deal with the rest after that. But they steadfastly refused to accept the money!

After fighting with them for about 1/2 hour, I told them I'll get the police for the officer to witness that they refuse to take the payment and left. By the time I got to the police station, my friend called me, telling me they are accepting the money now and I can come back without police. When I got back, they had finally stopped their barrage, and retreated into the back office, saying they'd call the headoffice to have them tell them how much she really owed. The new calculation (supposedly by the headoffice) was now 160$... Still way too much (amounts to about 5% per month, or 60% per year!)

I advised my friend NOT to pay the 160 $, but only the 80 $ - realizing, it's not going to be easy to get any money back from them. Finally (it was 5 minutes past their closing time) they accepted and processed the 80$. 

Now, check out the receipt below: They charged 18$ for management (gestión) - no other receipt has an amount in that field! These people are trying to steal more money even after realizing they were caught redhanded! Unbelievable!!!

Gestión 18.40$! What management did they do in the last week? Or is it the fee for having the audacity to question their ridiculous interest rates and predatory lending practices? 

What is really irking me is that in essence they are stealing money from the poorest of the poor people of Panama! Stealing hundreds of dollars from those who have to conserve every nickel and dime - literally! And all under the pretense of being a foundation with the mission to help that group of people! Despicable, if you ask me!

I do hope I find the energy to report them to ACODECO - the governmental department whose task it is to protect consumers.

Btw, the computer printing these numbers is an indication that this is not a simple mistake, but it is programmed into the system! It is something they do (or at least have the potential to do) all the time! And they are not even worried, because their client-base is mostly not educated enough about finances to notice that they are being robbed! 

Well, this time they messed with the wrong people... I'm curious to see how this story is going to continue...