Mafia Inc., the lender that never says 'No'
It's called Mafia Inc.
Massive turnoverccording to a report out this week from employers' association Confesercenti and covered in the Daily Telegraph, the mafia families are now collectively turning over £116bn annually, with a large percentage of that coming from loan sharking.
And as anyone knows, loan sharking only thrives in instances where all other lines of credit are closed. Sound familiar?
The problem with accepting terms from your local mob affiliate is, however, a bit more than a matter of sky-high interest rates. As author Roberto Saviano discovered, much to the cost of his personal safety, in Gomorrah, his brilliant exploration of the Naples-based Comarra crime organisation's vast financial and economic empire, getting in to bed with the mafia means taking on a business partner who will slowly bleed you dry before taking over your business or driving it into the dust.
At least our High Street banks, unhelpful as they are, can't be accused of that.
Shark kilingsAccording to the report, loan sharks forced the closure of 1,800 businesses in 2010 and were responsible for the loss of thousands of jobs. Confesercenti reckon around 200,000 Italian businesses are now tied up with loan sharks.
The economic crisis, which has bit hard in Italy, has seen a rise in loan sharking by the mafia and helped the four main organisations build up collective reserves of €65bn making them country's biggest – though illegal – bank.
So Mario Monti, the unelected technocrat put in charge of unravelling the spaghetti-like mess of Italy's economy faces one problem that is similar to that staring David Cameron in the face. How to get legitimate banks to lend to credit-starved small businesses?
And though the Italians have found their own work-around, I wouldn't recommend that route.