Debrecen, 2012. november 15.Debrecen, 2012. november 15.

Katalin Szoboszlai - Gergely Fábián -Lajos Hüse

„Money with Interest”

The Institution of Usory among those Living in Slum-like Conditions

Who we are?

Prof. Dr. Gergely Fábián PhDhead of the research,

sociologist

Dr. Katalin Szoboszlai PhDsocial worker

Dr. Lajos Hüse PhDsociologist

Backgrounds

Research work was in 2006, partners were Research work was in 2006, partners were Periferia Assotiation and University of Periferia Assotiation and University of Debrecen Faculty of HealthDebrecen Faculty of Health

Usury, loaning money at very high interest Usury, loaning money at very high interest and it is illegal in Hungary.and it is illegal in Hungary.

Main aim of the research was to Main aim of the research was to explore the explore the characteristics of the usury and to learn characteristics of the usury and to learn about the mechanism operating this system.about the mechanism operating this system. We wanted to investigate if the economic We wanted to investigate if the economic strategies of Roma households could be strategies of Roma households could be explained from the data about education explained from the data about education level and the labour market – so that the level and the labour market – so that the resuts of crime prevention from other resuts of crime prevention from other programs could persist in Roma programs could persist in Roma communities. communities.

Field of the research

Map of Hungary

4 settlemets:

Nyíregyháza, Tiszavasvári, Mátészalka, Hodász

Materials and Methods of Research

The data for this study was The data for this study was collected through collected through interviewsinterviews. . Interviews were conducted in the Interviews were conducted in the homes of the respondents during a homes of the respondents during a major study concerning usury major study concerning usury research. research.

The The extremly badextremly bad conditions of the conditions of the buildings is typical to the four buildings is typical to the four slums. slums.

During the research colleagues During the research colleagues from the Nyíregyháza Periféria from the Nyíregyháza Periféria Association performed Association performed 100 100 interviewsinterviews in the selected slums. in the selected slums.

Houses in the Huszár slum in Nyíregyháza

Living conditions in Slums

Households with 2 adults and Households with 2 adults and 22 children children or or 22 adults and adults and 33 children children are typical, comparising 4 are typical, comparising 455% of the total. % of the total.

Families with more members than the national or county Families with more members than the national or county average average live in more crowded and worse housing live in more crowded and worse housing conditionsconditions based upon the number of family members based upon the number of family members living in one household and the number of rooms per living in one household and the number of rooms per apartment.apartment.

Living conditions are poorish in these slumsLiving conditions are poorish in these slums: houses are : houses are delapidated and crowded; furnitures are poor quality, in delapidated and crowded; furnitures are poor quality, in there are non-automatic washing machines there are non-automatic washing machines ((only the only the traditional typestraditional types), only half of houses are bathrooms and ), only half of houses are bathrooms and it is less than flush toilets.it is less than flush toilets.

World of work The educational level of the respodents is very low.The educational level of the respodents is very low.

Elementary school education is dominant.Elementary school education is dominant. Because of the low level of education it is not surprising that Because of the low level of education it is not surprising that

unemployment is almost continuous for most of the residents unemployment is almost continuous for most of the residents living in these areas. living in these areas. Nearly twenty percent (20%) of the Nearly twenty percent (20%) of the respondents have not had work for the last 5 years.respondents have not had work for the last 5 years.

Unemployment is an acute problemUnemployment is an acute problem not only among those not only among those interviewed but it is typical to the other adult members of their interviewed but it is typical to the other adult members of their families as well. families as well.

62.3 % of the respondents were involved in some form of 62.3 % of the respondents were involved in some form of unemployment. They spent 11 months on average without unemployment. They spent 11 months on average without jobs and the difference among the different areas cannot be jobs and the difference among the different areas cannot be measured. measured.

It is not surprising that the most frequent answer to the It is not surprising that the most frequent answer to the question: „What work would you like to do?” was: „Any”. question: „What work would you like to do?” was: „Any”.

Support system

The family ties are very strong in these families since 93 % of the The family ties are very strong in these families since 93 % of the respondents assessed family ties as good or very good.respondents assessed family ties as good or very good.

Of the surveyed families 61% said that their families have friends Of the surveyed families 61% said that their families have friends and they can rely on them in many cases. and they can rely on them in many cases.

In the sample the value of the positive relationship with the In the sample the value of the positive relationship with the professional helpers was very high and was higher than all others professional helpers was very high and was higher than all others except with close family memebrs. except with close family memebrs.

Judging the Judging the positive relationships of the familiespositive relationships of the families (%) (%)

68,861,9 61,2

54,4

0

20

40

60

80

Withneighbourhood

Withprofessional

helpers

With distantrelatives living in

the samesettlement

With relativesliving in othersettlements

In case of trouble whose help can they rely on? (%)

90

50

33,3 30,9 27,320,2

0

20

40

60

80

100

The ranking is very natural as families primarily rely on immediate family members, relatives and friends in case of trouble and only after that do they turn to professional helpers and social institutions.

The institution of usury

Behind this distribution of answers two strongly differentiated Behind this distribution of answers two strongly differentiated factors were factors were defineddefined:: reliance on non-family membersreliance on non-family members and and reliance on familyreliance on family..

1. factor: Non-family Helpers 2. factor: Family

Acquaintances: 0.891 Immediate family: 0.908

Neighbourhood: 0.789 Relatives: 0.606

Friends: 0.729

Professional helpers: 0.559 Professional helpers: -0.110

Immediate family: - 0.121

Table 1. Whose help can they rely on when they are in trouble? (factors)

If the respondents cannot rely on the help of the immediate family, then the relatives, the acquaintance, neighbour circle and the role of professional helpers, social institutes, where they can turn to, become more important.

What do families do if they have financal problems?

70,1

7,2 5,2 4,1

0

20

40

60

80

Asks for money Tries to find work Sell Property Saves money

Specifically for financial problems the surveyed families primarily ask for money (70.1%).

What does it means: „Ask for money”?

The poor The poor peoplepeople generally don't get a loan from the generally don't get a loan from the banks, because banks, because theythey mean high risks for the banks mean high risks for the banks..

That is why the immediate family, relatives and the That is why the immediate family, relatives and the closest friends are the first place to go for a loan.closest friends are the first place to go for a loan.

OOther ways to get moneyther ways to get money:: using pawnshops, selling using pawnshops, selling property, getting self-government grants and on rare property, getting self-government grants and on rare occasions getting a loan from their workplace or asking occasions getting a loan from their workplace or asking colleagues for money. In some cases the respondents colleagues for money. In some cases the respondents said that they could do shopping on credit. said that they could do shopping on credit.

””If so then I go to ask for loan. Within the family. Then I give it back as If so then I go to ask for loan. Within the family. Then I give it back as much as I get. There are many usurers so I ask only my family for loan.”much as I get. There are many usurers so I ask only my family for loan.”

How is the usury loans work?

It is often typical with usury loans It is often typical with usury loans that that borrowers have to pay of 50-borrowers have to pay of 50-100% interest back100% interest back. But in some of . But in some of the more informative interviews even the more informative interviews even higher interest was mentioned. higher interest was mentioned.

The real trap of the usury loan is not The real trap of the usury loan is not only the high interest but in the only the high interest but in the system of loaning. Other methods of system of loaning. Other methods of making making the debt endlessthe debt endless are are applied. One of the rather common applied. One of the rather common methods is that the minute when the methods is that the minute when the debt is to be paid back, the usurers debt is to be paid back, the usurers immediately want the whole amount immediately want the whole amount with the interest and with the interest and if the debtor is if the debtor is unable to pay it back in one amount unable to pay it back in one amount then they put the interest on the then they put the interest on the remaining sum as if they gave this remaining sum as if they gave this loan at that timeloan at that time. .

„If I take twenty thousand Forints then I will have to give forty. So now that forty is his according to him. Then from that I pay back only fifteen then he puts the interest on the remaining twenty-five. And then he takes my apartment from me.”

This system is a circle situation, never-ending story:

20.000 HUF loan + 20.000 HUF interest (100%) = 40.000 HUF usury interest

IF: 15.000 pay back, 25.000 HUF dept + 25.000 HUF interest (100%)

= 50.000 HUF usury interest. And so on…

Summary

Usury interest is not typical Roma’s problem, it is to Usury interest is not typical Roma’s problem, it is to correlate to the poverty.correlate to the poverty.

The key word is „economic-social addiction” in the The key word is „economic-social addiction” in the mechanism of usury interest.mechanism of usury interest.

Structural change is needed: poverty reduction, more Structural change is needed: poverty reduction, more workplace for people, more income for families from workplace for people, more income for families from legal sources (work, social security system).legal sources (work, social security system).

Money with Interest is a criminal action. The Parlament Money with Interest is a criminal action. The Parlament accepted the act about it in 2011.accepted the act about it in 2011.

Against usury calandar

Say NO!

loan

redemption getting back

blackmail

Campaign in 2009