SINGAPORE: More people are approaching licensed
moneylenders since the opening of Singapore's two casinos about a
year ago.
Moneylenders' Association of Singapore president
David Poh said the association has seen about a 40 per cent jump in
the number of loans offered.
Figures from the Law Ministry's Insolvency &
Public Trustee's Office showed an eight per cent increase in the
number of licensed moneylenders in 2010 compared to the year
before.
There were 239 licensed moneylenders as at end December 2010,
compared to 221 in 2009.
The number of such companies joining the the industry's association
has also gone up three times in a span of just one year, from 50 in
2009 to 160 in 2011.
But dealing with problem gamblers is a somewhat risky business for
these agencies, especially when borrowers struggle to pay off
interest rates which can amount to 18 per cent per annum.
Mr Poh said it is often more difficult to collect debts from
gamblers, as they tend to gamble away the borrowed money.
Debt recovery companies Channel NewsAsia spoke with said they are
also getting busier.
A co-owner of Tri-Credits said while it was good that his company
is seeing an increase in takings from offering loans, it is often
difficult to recover the debts.
"Everybody is giving excuses such as, they lost money in the
(casinos) and they can't afford to repay such a big amount," he
said.
To address this problem, the Moneylenders' Association has put up a
database of people deemed as risky borrowers, on its website.
Mr Poh said with this system, people can pay a service charge and
ban their family members from borrowing money, through the
website.
He added that 20 to 30 spouses have been banned since last year and
that the numbers are increasing.
The number of mediation cases the association handles is also on
the rise, with about three to five cases daily.
Moneylending companies said they are also seeing younger borrowers,
those in their 20s, struggling to pay off debts.
Mr Poh said these younger borrowers tend to be working
adults.
The law states that for loans not exceeding S$3,000 given with
security -- or "secured loans" -- where the borrower's annual
income is less than S$20,000, the maximum rate of interest that a
moneylender can charge is 12 per cent per annum.
For loans not exceeding S$3,000 given without security -- or
"unsecured loans" -- where the borrower's annual income is less
than S$20,000, the maximum rate of interest that a moneylender can
charge is 18 per cent per annum.
For loans above S$3,000, the rate of interest will be agreed upon
between the moneylender and the borrower.
-CNA/wk
