When his grandmother died, Hongkonger Fai Chan inherited her flat, a 377 sq ft unit in eastern Kowloon valued at HK$3 million (US$382,000) in 2023.

Before it could be his, however, the fire protection engineer had to pay a HK$1.2 million premium to the Housing Authority, a sum he did not have.

That was the start of his journey into the world of borrowing at high interest rates and sinking deep into debt.

Shunned by banks due to a past bankruptcy that scarred his credit rating, he turned to two well-known finance companies. Each lent him HK$600,000, and he paid the Housing Authority.

But their 40 per cent annual interest rate over 10 years meant he had to repay HK$22,000 a month, swallowing almost his entire salary of HK$20,000 to HK$30,000.

When the punishing monthly payments became unbearable, he turned to smaller, less regulated lenders to borrow even more.