Educate citizens about financial management

SPEECH BY ER DR LEE BEE WAH, MP FOR NEE SOON GRC, AT THE SECOND READING OF THE MONEYLENDERS (AMENDMENT) BILL IN PARLIAMENT ON 08 JAN 2018

Mr Speaker, Sir

Moneylending is an issue that is close to many MPs’ hearts, as it is an issue that affects our constituents. We all know that going to borrow money is the only solution for some, albeit this is often a flawed one, because servicing the loan would sink the borrower deeper into the red. The slope is a slippery one. Easy to fall into and hard to get out. First of all, I support the introduction of a cap on loans from licensed moneylenders. It will hopefully prevent some people from borrowing way beyond their means.

Moneylending is a problem that has lingered for some time. A few years ago, I spoke about the loanshark problem and illegal moneylending in Singapore. Thanks to government intervention, loansharking activities appear to have abated, somewhat. But there will also be the issue of people needing to borrow money, and then over-borrowing. My only concern is whether this new cap will lead to even more underground moneylending activities and at even more cut-throat rates for desperate borrowers? Will the government enhance the penalties for anyone caught operating an illegal moneylender joint?

We have to nip the problem in the bud. Why are people getting into debt in the first place? These days, it is also very common to come across advertisements for “$0” upfront products. Yet when you calculate the cost of the product as advertised upfront and the total sum of the installments, there is a significant disparity. One could purchase several expensive items without forking out a cent, only to realize months down the road that he or she is being saddled with bills that they can’t pay off. Should there be some restrictions on the way advertisements for hire purchases are presented?

Credit card debt is a serious problem in Singapore. In 2015, the Straits Times reported that 85,352 Singapore consumers have overdue unsecured debt totalling $288.4 million. The Credit Card Bureau also revealed that in the same year, the total number of delinquent debtors hit 101,493, a significant increase from just over 73,000 in 2011. The convenience of online shopping probably contributes to this trend.

Gambling addicts are another group of vulnerable people who often get caught in the never-ending spiral of borrowing and owing money. In 2015, the National Addiction Management Service (Nams) reported a doubling in the number of gambling addicts seeking help since 2010. It is good news that more people are seeking avenues to quit their gambling addiction. I would call for closer cooperation between the National Council on Problem Gambling (NCPG) and registered moneylending firms, to help NCPG better identify and reach out to gambling addicts.

In light of the trends above, will the Ministry consider a widespread campaign about financial management and prudence? It has to start early- I would suggest as early as upper primary school. We should ingrain in our young minds to spend within your means. We should also talk about the ill of gambling. Because gambling is just like drugs- once you start, it can be addictive and difficult to get rid of. I’ve also seen some young graduates use credit card overdrafts to support a lifestyle they can’t afford. More awareness also needs to be drawn to the Credit Counselling Singapore programme, which aims to help individuals in debt through education, counselling and debt management.

Sir, in Chinese please. 限制借贷公司可以借出的数目是好事，不过我担心，真正要借钱的人会转向非法阿窿借钱。政府应该关注这个趋势，并考虑提高对阿窿的刑罚。

我们也该思考，为什么会有人深陷 “债”海? 放眼市场，”零首付”的分期付款制度和网络购物的方便，无疑吸引了不少国人过度消费。数据也显示，现在欠卡债的国人越来越多，因为赌博上瘾而求助的人也越来越多。因此，希望当局能大力宣传财务管理知识。