While the former World Bank head Paul Wolfowitz tenure ended in controversy,
The Philippines Peso is becoming strong; today it's $1 = P 41.10
Although the World Bank and the Philippine peso is a good topic, sorry to say it's not our topic for today. :)
Our topic is 5-6. No it's not a numbers game, it's the numbers of a small scale business owner here in the Philippines "investors" buzz word.
What are 5-6 stands for?
5-6 is the ratio of a loan to payment value system.
For every 5 loan you give back 6. This traditional loaning structure has very deep roots in the Philippines. The puzzle thing about this is that although is said to be Philippine made, it's not born by the Filipinos. The 5-6 system is develop and is widely used by Indian nationals.
Today not only Indian national's use the system, Filipinos also adopted it.
"Bombay" is the term used to describe a person who loans money and collects the payment in a day by day basis.
The advantage of going to the Bombay is easy loan, no paper works and no collateral.
Some use the co-sponsorship system where the loaner has a partner, who just in case the loaner can't pay will shoulder the loan and pay for it.
The history of the 5-6 loan system is not clear, but legend says that Indian nationals in there traditional attire sell umbrellas and mosquito nets, the locals buys to them and pays on a daily bases.
A group of locals, somewhere in pampanga develop the system. They sell appliances and food. Payments are collected weekly or monthly.
Think about it:
Chinese and Indian nationals came to the Philippines and prosper.
Why is it that the Filipinos go to a foreign country to prosper and the foreigners go to the Philippines and become wealthy?
Filipinos should look into this and think,
... why I have to go there and they go here to prosper ?
On the lighter side:
The Chinese nationals came to sell siopao (steam bread)
The Indian nationals came to sell mosquito net.
... Filipinos buys them. :)