Such transactions are conducted without proper documentation, sometimes using signed blank papers between known persons. There are certain regulations & act passed by the TN govt. to curb such dealings fleecing poor & innocent borrowers imposing too high rate of interest say 20,30% p.m. Govt.employees are governed by the Conduct & Discipline Rules of the state which prohibits such activities as a side business.
Also please read Tamilnadu Money Lending Act 1957 and the Tamilnadu Prohibition of Charging Exorbitant Interest Act. 2nd March 2019 From India, Bangalore