[h=1]MORE SINGAPOREANS GOING BANKRUPT AFTER BORROWING FROM LEGALIZED AH LONGS[/h]
Post date:
28 Jan 2015 - 5:49pm
According to a recent report on bankruptcy orders, there are more and more bankruptcies occurring after individuals are unable to pay back legalized money lenders.
The Estates Committee which compiled the report showed that the number of bankruptcy orders filed by licensed moneylenders for individuals who could not pay their debts increased from 7.3% of all bankruptcies in 2012 to 10.5% in 2013.
This was out of a total 210 bankruptcy orders filed in 2013, also an increase from the 128 filed in 2012 and only 80 in 2011.
According to MP Seah Kian Peng, one reason for this trend in more licensed money-lending related bankruptcies, is that the total number of licensed moneylenders peaked in 2011 when there were 249 such lenders.
In 2013, the number dropped to 200.
Mr Seah noted that the large number of money lenders also meant that they were more accessible. “The number of bankruptcies arising from that naturally increased, following a time lag," said Mr Seah.
The Estates committee explained that it is concerning that the amount of lending was on the rise and they recommended that more restrictions be put in place to control interest rates and restrict access to moneylenders.
Mr Seah added that "licensed moneylenders still have an important role to play", as the alternative would be for people to borrow from unlicensed lenders, which would be harder for the Government to monitor.
Another issue which was raised by the report, was that there has been a growth in pawn shops and moneylending businesses especially in the heartlands. The number of pawn shops actually doubled from 2006 to 2013 and the loans given by pawn shops now stands at $5.5 billion. This indicated that there are more vulnerable groups and lower-income Singaporeans finding it hard to get by.
The total value of loans also stands at $478 million at the end of 2013, only $2 million less than 2011 despite a significant decrease in the number of licensed money lenders here.
The president of the moneylenders’ association of Singapore, David Poh, explained that the association is working with the Ministry of law to institute a 4% interest rate cap plus a 4% late payment surcharge.
He admitted that there needs to be a cap on interest rate of it isn’t fair for vulnerable borrowers but setting it too low will disadvantage moneylenders.
Related:
[h=3]Kaki Bukit Grassroots Chairman is president of Licensed Ah Long’s Association[/h]
Post date:
28 Jan 2015 - 5:49pm
According to a recent report on bankruptcy orders, there are more and more bankruptcies occurring after individuals are unable to pay back legalized money lenders.
The Estates Committee which compiled the report showed that the number of bankruptcy orders filed by licensed moneylenders for individuals who could not pay their debts increased from 7.3% of all bankruptcies in 2012 to 10.5% in 2013.
This was out of a total 210 bankruptcy orders filed in 2013, also an increase from the 128 filed in 2012 and only 80 in 2011.
According to MP Seah Kian Peng, one reason for this trend in more licensed money-lending related bankruptcies, is that the total number of licensed moneylenders peaked in 2011 when there were 249 such lenders.
In 2013, the number dropped to 200.
Mr Seah noted that the large number of money lenders also meant that they were more accessible. “The number of bankruptcies arising from that naturally increased, following a time lag," said Mr Seah.
The Estates committee explained that it is concerning that the amount of lending was on the rise and they recommended that more restrictions be put in place to control interest rates and restrict access to moneylenders.
Mr Seah added that "licensed moneylenders still have an important role to play", as the alternative would be for people to borrow from unlicensed lenders, which would be harder for the Government to monitor.
Another issue which was raised by the report, was that there has been a growth in pawn shops and moneylending businesses especially in the heartlands. The number of pawn shops actually doubled from 2006 to 2013 and the loans given by pawn shops now stands at $5.5 billion. This indicated that there are more vulnerable groups and lower-income Singaporeans finding it hard to get by.
The total value of loans also stands at $478 million at the end of 2013, only $2 million less than 2011 despite a significant decrease in the number of licensed money lenders here.
The president of the moneylenders’ association of Singapore, David Poh, explained that the association is working with the Ministry of law to institute a 4% interest rate cap plus a 4% late payment surcharge.
He admitted that there needs to be a cap on interest rate of it isn’t fair for vulnerable borrowers but setting it too low will disadvantage moneylenders.
Related:
[h=3]Kaki Bukit Grassroots Chairman is president of Licensed Ah Long’s Association[/h]
