14 DAY TRIAL // More news from China: students in Wuhan, the capital of the Hubei province, are so desperate to own an Apple product that they will take high-interest loans to buy the expensive gear, simply to overcome a complex.
The China Daily reports that over 20,000 college students have taken loans with a 47% interest rate to buy expensive electronics, mostly Apple devices like the iPhone and the iPad.
To put it into perspective, the loans handed out between the start of January 2012 and February 2013 have a total value of 160 million yuan, or roughly $25.7 million / €19.7 million.
The loans were passed out by Home Credit China (HC China), a subsidiary of international investment business PPF Group. Not surprisingly, many of their clients can’t afford to pay back the cash.
“We have lost touch with about 100 of them, getting no response to calls or letters reminding them about delayed payments,” said Liu Mingwei, Wuhan regional manager of HC China.
But why is all this happening? Why are Chinese students so mesmerized by iDevices? One student at Wuhan University of Science and Technology, named Yu, tells her story.
“Apple products are a common topic or a particular community on campus. I used to feel isolated while they were discussing and playing with iPhones or iPads.”
Half of her classmates and roommates reportedly have an iPhone. “I felt embarrassed even to take a look when they were in a heated discussion about a new application,” Yu confessed.
So she used a credit loan to buy an iPhone “in the heat of the moment during a marketing campaign by a salesman of HC China, but felt regret afterward.” The girl eventually had to call her parents to help out with the loan payments.
As you can imagine, Yu is just one of many students who had to seek help to pay back their loans.
Because of the severity of the situation, some Chinese stores now refuse cooperation.
“I counted the loan rate and refused such unscrupulous business,” said a store manager.
Qiu Baochang, leader of the legal team with the China Consumers' Association, is now instating “a rational consumption guide to educate college students,” according to the report.