Katalin Szoboszlai-Gergely Fábián-Lajos Hüse „Money with Interest”

1. Katalin Szoboszlai-Gergely Fábián-Lajos Hüse„Money with Interest” The Institution of Usory among those Living in Slum-like Conditions Budapest, 2011. 12. 05.

2. Who we are? Prof. Dr. Gergely Fábián PhD head of the research, sociologist Dr. Katalin Szoboszlai PhD social worker Dr. Lajos Hüse PhD sociologist

3. Backgrounds • Research work was in 2006, partners were Periferia Assotiation and University of Debrecen Faculty of Health • Usury, loaning money at very high interest and it is illegal in Hungary. • Main aim of the research was to explore the characteristics of the usury and to learn about the mechanism operating this system. We wanted to investigate if the economic strategies of Roma households could be explained from the data about education level and the labour market – so that the resuts of crime prevention from other programs could persist in Roma communities.

4. Field of the research Map of Hungary 4 settlemets: Nyíregyháza, Tiszavasvári, Mátészalka, Hodász

5. Materials and Methods of Research • The data for this study was collected through interviews. Interviews were conducted in the homes of the respondents during a major study concerning usury research. • The extremly bad conditions of the buildings is typical to the four slums. • During the research colleagues from the Nyíregyháza Periféria Association performed 100 interviews in the selected slums. Houses in the Huszár slum in Nyíregyháza

6. Living conditions in Slums • Households with 2 adults and 2 children or 2 adults and 3 children are typical, comparising 45% of the total. • Families with more members than the national or county average live in more crowded and worse housing conditions based upon the number of family members living in one household and the number of rooms per apartment. • Living conditions are poorish in these slums: houses are delapidated and crowded; furnitures are poor quality, in there are non-automatic washing machines (only the traditional types), only half of houses are bathrooms and it is less than flush toilets.

7. World of work • The educational level of the respodents is very low.Elementary school education is dominant. • Because of the low level of education it is not surprising that unemployment is almost continuous for most of the residents living in these areas. Nearly twenty percent (20%) of the respondents have not had work for the last 5 years. • Unemployment is an acute problem not only among those interviewed but it is typical to the other adult members of their families as well. • 62.3 % of the respondents were involved in some form of unemployment. They spent 11 months on average without jobs and the difference among the different areas cannot be measured. • It is not surprising that the most frequent answer to the question: „What work would you like to do?” was: „Any”.

8. Support system • The family ties are very strong in these families since 93 % of the respondents assessed family ties as good or very good. • Of the surveyed families 61% said that their families have friends and they can rely on them in many cases. • In the sample the value of the positive relationship with the professional helpers was very high and was higher than all others except with close family memebrs. Judging the positive relationships of the families (%)

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

10. The institution of usury Behind this distribution of answers two strongly differentiated factors were defined:reliance on non-family members and reliance on family. 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.

11. What do families do if they have financal problems? Specifically for financial problems the surveyed families primarily ask for money (70.1%).

12. What does it means: „Ask for money”? • The poor people generally don't get a loan from the banks, because they mean high risks for the banks. • That is why the immediate family, relatives and the closest friends are the first place to go for a loan. • Other ways to get money: using pawnshops, selling property, getting self-government grants and on rare occasions getting a loan from their workplace or asking colleagues for money. In some cases the respondents 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 much as I get. There are many usurers so I ask only my family for loan.”

13. It is often typical with usury loans that borrowers have to pay of 50-100% interest back. But in some of the more informative interviews even higher interest was mentioned. The real trap of the usury loan is not only the high interest but in the system of loaning. Other methods of making the debt endless are applied. One of the rather common methods is that the minute when the debt is to be paid back, the usurers immediately want the whole amount with the interest and if the debtor is unable to pay it back in one amount then they put the interest on the remaining sum as if they gave this loan at that time. How is the usury loans work? „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…

14. Summary • Usury interest is not typical Roma’s problem, it is to correlate to the poverty. • The key word is „economic-social addiction” in the mechanism of usury interest. • Structural change is needed: poverty reduction, more workplace for people, more income for families from legal sources (work, social security system). • Money with Interest is a criminal action. The Parlament accepted the act about it in 2011.

15. Against usury calandar Say NO! loan blackmail getting back redemption Campaign in 2009