Moneylenders aiming your foreign workers

Have you walked past moneylending places and seen a sign like this recently?

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Walk around Singapore and you would notice quite a few licensed moneylenders have set up shop at very strategic places, like town centrals and shopping malls near places where foreign workers hang out on their off days. You can’t miss them, with their blinking LED boards touting how easy it is to get a loan from them.
Just yesterday, Channel NewsAsia reported that the MOM and Ministry of Law issued a joint statement announcing that those who are here on work permits  (yeap, foreign workers and foreign domestic workers) will be repatriated if they borrow from unlicensed moneylenders aka loansharks. This penalty will be implemented in 2019.

The report did also mention that the foreigners residing in Singapore will also have the amount they can borrow from licensed moneylenders restricted.

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We cannot help but wonder if this is a reactive move by the Manpower and Law Ministries.

In the first place, why are the moneylenders aiming the foreign workers and maids working here, who mostly live from paycheck to paycheck? Are they considered eligible for any form of loans at all?

The problematic portion is that when they borrow, they use their work permits which lists the address of the employer. Not their own home details!

Recently I heard a case of an Indonesian maid who suddenly ran away from her employer one day, and then debt collectors come knocking on the employer’s door. By then, the maid has long disappeared (probably taken a ferry back to Indonesia through Batam?) and the employer has lodge a police report and hope that the harassment stops. I’m sure this story is not uncommon among employers of FDWs.

The question is whether threatening repatriation solves the issue! These foreign workers definitely want to run away from their creditors, whether licensed or unlicensed. Repatriation means you just gave them a confirmed ticket out of the situation! Will the loansharks or licensed moneylenders just write the debt off? We highly doubt so lor. There’s no free lunch in this world right?

It doesn’t make sense to allow these foreign workers to come here, accumulate debts and run off when they are unable to pay, and leave their employers saddled with the problem of the debt.

If MOM or Min Law was serious about tackling this issue, then the first thing is to make it very clear that such credit facilities should not be easily extended to these foreign workers, especially when no one really can be sure where their addresses back in their homelands are. Even then, once they leave Singapore, they are not within our jurisdiction already!

Second is to provide proper protection to employers against such harassment and debt collection. Thinking radically, could the insurance they purchased for their foreign worker include clauses to cover these situations?

Moneylenders who advertise easy credit to these workers should be rapped too. In fact, moneylenders should not be allowed to put up signs that lure people in need of money into their shops.

So MOM and Min Law, how? What have you solved with the new announcement really?

With 1.39 million foreign workers in Singapore based on Singstats’ data for 2015, the least the government can do is properly think of how to balance the interests of the employers and the needs of these foreign workers (are their wages really sufficient?), and the mercenary advances of these moneylenders.