Musanze business community cautioned against loan sharks

The business community in Musanze should stay away from loan sharks, the people who lend money at exorbitant rates, commonly known as Banque Lambert, because they are a threat to the security and economy of the district and the country in general, officials have said. The warning was issued by Rwanda National Police and district officials after it emerged that most business people in Musanze are increasingly engaging loan sharks. Francis Gahima, the Northern region Police spokesperson, warned the business community in the meeting held last week that dealing in such a venture is risky and illegal and urged them to stop. Bank Lambert is transfer of money from one person to another with an agreement to pay extra profit within a set deadline. It becomes a problem if the borrower does not meet deadline, because interest are normally high. The two parties have agreement and the receiver gives a cheque, which the lender holds as collateral until they are paid. “It is an issue which is a threat to the community and it involves business people around the city. Banque Lambert is illegal. There are acceptable procedure through which one can get a loan and this is through banks. No short cuts,” he said. “Banque Lambert is a scam that has led to conflict among families once they fail to pay. We have proof that the business is prevalent here, which we will not accept,” Gahima said. Losing property He said Police have received complaints from people who failed to pay and their property was confiscated. People have started fleeing their homes because of high amount of money they are being asked to pay, the officials said. The profit agreed between the two parties normally ranges between 15 per cent and 35 per cent of the principal and the period of time within which to pay but it can vary according to the agreement. Although the business is said to be illegal and a threat to the community, Police admit it attracts no sentence under Penal Code. According to Severain Cyusa, the president of Private Sector Federation in Musanze District, the business affects economy in the region. “People involved in this business are advised to cease because it is illegal and affects families. Some people have lost property such as houses, cars and the like, others are fleeing to evade these loan sharks,” said Cyusa.