Chinese loan sharks preying on women with 'naked loans'

Illegal loans targeting vulnerable borrowers have increased in a slowing economy.

By Elizabeth Shim  

Loan sharks are preying on women in China, requiring naked photos as collateral. Photo by Frame China/Shutterstock

An illegal loan scheme in China has drawn outrage for requiring women borrowers to submit nude photos as collateral.

The microloans from shadowy lenders to female college students were offered on Jiedaibo, a peer-to-peer online lending platform, The Financial Times reported Wednesday.

Chinese loan sharks demanded the women borrowers send naked photos of themselves while holding their identification cards.

A student in Jiangsu Province said she agreed to the exchange in February for an $18,000 loan, but after her debt doubled in four months and her lenders issued threats, she had to ask her family for money to avoid the publication of her nude pictures, The Guardian reported.

Loan sharks in China are known to use harsh measures to coerce small-time borrowers, and the country's slowing economy is delaying debt recovery in many sectors.

Han Chuanhua, a bankruptcy lawyer in Beijing, said loan sharks sometimes send thugs to people's homes. One of his clients had his legs broken, Han said.

Migrant workers are the most vulnerable group because they have a hard time staying employed in an unstable economy. Because of their legal status, migrants are also reluctant to reach out to police for help, the Financial Times reported.

Jiedaibao is a platform that has received $304 million in funding and is owned by a Beijing-based venture capital firm founded in 2007.

A spokesman for Jiedaibao condemned the "naked loans" on Wednesday.

"This kind of naked loan is actually taking advantage of the online platform to operate an illegal usurious offline business," the company said.

Commenters in China expressed their anger over the growing illegal tactics that prey on vulnerable borrowers.

"These kinds of loans are like opium," said one commenter on Weibo. "Why does the regulatory authority neglect it?"