“5-6” or “Bombay” lending system: Goodbye or Remain?

President Rodrigo “Digong” Duterte wanted to abolish the Indian lending system, colloquially known as “5-6” or “Bombay” for it will more suffering on the impoverish  Filipinos. However, this may affect the life of the Filipinos especially those who lends on this system on the micro and medium enterprises. As accustomed by several Filipinos, “Bombay” system serves as the capital source for most of micro enterprisers in our country and those who need much money  to sustain their living especially the improvised ones.

In this system, first, a debtor is going to lend an amount of money to a “Bombay. After that, the “Bombay” will compute for its interest to have its total amount. And after a day and afterwards, the lender will collect the cost every day until the payment reach the deadline of payment.

Moreover, “5-6” system has large interest. So, the total amount bloated into several pesos. For, this made some Filipinos unable to pay their debt in this system. I think the computation of interest is five divided by 6, multiplied by 100 (5/6=0.83*100). Therefore the interest will be eighty-three per cent (83%). Yet, one of my source said that the interest is only twenty percent (20%).

However, although the total amount is expensive, the debtor may tell the lender that he has no money to pay for.

In fact, “Bombay” lending system doesn’t need any requirements, like birth certificate or marriage contract which is in contrary to Lending Institution System or in the Lending Cooperative. And the only “requirement” is the debtor should pay its debt or the lender must see him working to gain payment.

As a student, I’m not in favor to prohibit this system, for it will make several Filipinos, especially in the micro enterprises and who are need, to be in the poverty line. Furthermore, it may affect on the living of the lenders. Although there is a move of the government to replace this system, will the replacement succeed?

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