Private experience about the 'arawan' business


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Earning for a living is important in the Philippines. But not every business is really working for you. Here are my experiences with the 'arawan business'.

Business: Money lending

If you are here in the Philippines, you will know, how hard the life of an ordinary people can be here. We need to find means for our daily living. We need to think what to do to earn money. What kind of business we need to start and we need to think if it will become successful. Many guys here, mostly from India or China, are doing business like money lending and selling home appliances. Thinking that if the "Bombai" (business owner from India) can survive their business here, how about if I try it also? But I cannot sell the home appliances because I need to find the wholesaler store for that and I need to hire some guys to work with me to carry the appliances like plastic drawer, foam (bed mattress) and many more. So I will start the money lending business or commonly known here as 'arawan'. Translated to English it is: 'daily collection'.

20 PHP They call it 'arawan' because some people, especially the sari-sari store owner, small shops or Pedi cab driver earn daily new money so they can pay on a daily basis back too. I ask my neighbors first how they pay back the money they borrow and how much is the interest. They told me it is by 20% interest. So if they borrow 1,000 pesos the interest for one month is 200 pesos. They can pay it on daily or weekly basis. So I start my money lending business, but me and my husband decided to offer 10% interest only for a month. That way, we can help my fellow Filipino to survive and we can earn even a little only. Fair enough. I start to ask my son to ask his co-workers if someone want to borrow money.

I got 3 person for the first month. And they need to pay on weekly basis. For example, if one person borrow 3,000 pesos. I divide that into 4 weeks plus the 10% interest. The total amount they need to pay weekly is 825.00 pesos. They take money from me and they give me their ATM card from their company. Every week I need to go to the bank and withdraw their salary for that week, take what is due for me and give the rest to them. At first it is okay, but then their is this one guy who borrow money from me on weekly basis also. But every week he don't want me to take back the payment. All he want to give is the interest for one week. And it is so small, compare if he give me back the real weekly payments, and I can give the money to other people who also come to borrow money.

I talk to him for how many times that he need to give the money weekly so he can ask again for another loan but he always have his own alibis why he cannot give me the exact amount every week. The one month becomes 4 months and the principal money, he has not yet fully paid. I decided to talk to him again, ask him to pay me in full. He can transfer his ATM card to other people and he can do whatever he want to do. I know their is a lot of guy who is willing to accept the interest every week only but it is because they give 20% interest on their money. Now, I need to change the interest into 20% too. So if I encounter again someone that need to give only interest rather than to pay it weekly, it is okay with me. I will earn from them. Because if they borrow 3,000 plus 20% interest I got already 600. And if they choose to give interest this week, they need to give me 200 pesos and it is not deducted for the principal amount that they borrow.

I offered help in form of the lowest interest on my money, but some love to take advantage of this. The situation in this kind of business is: to survive. I need to save my money, so I need to play what other people is doing to survive in this kind of business.

And you need to be wise also if you are planning to do the 'arawan' business. Because if the news scattered in the neighborhood that you are lending money, there are a lot of people coming to your house to borrow money. Sometimes even if you want to earn, you need to choose the person that you need to trust in terms of money. So many here will ask money for 'arawan', but they failed to pay daily. The bad thing is, they are hiding once you are coming to collect payments from them. This kind of business is not really the one I like for me, myself and my fellow Filipino. But most of them love to dig their own hole. Sad, but true.

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