160 foreign workers sent home since Oct for borrowing from loan sharks, Latest Singapore News - The New Paper

160 foreign workers sent home since Oct for borrowing from loan sharks

This article is more than 12 months old

Mostly maids, they had borrowed money from loan sharks

About 160 foreign work pass holders - mostly foreign domestic workers - who borrowed money from unlicensed moneylenders and loan sharks have been repatriated since last October and barred from employment here.

Also, two maids are being investigated by the Ministry of Manpower (MOM) for acting as brokers for licensed moneylenders and profiting from it.

They may be charged under the Employment of Foreign Manpower Act for working illegally without a valid work pass. They can be fined up to $20,000 or sentenced to prison for up to two years, or both.

MOM revealed details of these enforcement actions in response to queries from The Straits Times, following an announcement on Monday by the Ministry of Law (MinLaw) of new measures to tackle the trend of foreign work pass holders borrowing money here.

New measures include further tightening of loan caps for low-income foreign workers, restrictions on foreigners as guarantors as well as limits for moneylenders on the supply of loans to foreign borrowers.

Last November, the Government had also introduced measures, such as new aggregate loan caps on what foreigners can borrow from moneylenders, and also the penalties in repatriating foreign work pass holders and barring them from employment here if they had borrowed from loan sharks.

But the number of foreign borrowers who take loans from licensed moneylenders has continued to spike this year to 53,000, up from 35,500 in the same period last year and 4,000 in the first half of 2016.

The number of work pass holders acting as guarantors also grew from about 50 three years ago to about 6,000 last year, said MinLaw, adding that some were found to have brokered loan applications for fellow work pass holders in exchange for money.

MinLaw said the new measures aim to strike a balance between calibrating the supply of credit and protecting borrowers, while recognising that some foreign work pass holders may have genuine reasons to borrow.

"The Government will continue to monitor the situation closely following the implementation of these measures. We are prepared to do more if necessary, including a complete prohibition on lending to foreigners," it added.

Credit Association of Singapore president Peter Tan said the need for guarantors is not a common practice and depends on the individual moneylenders and their risk appetite.

"We are providing a service. When people need the money fast, we can do that, and some of these people are able to pay back without problem," said Mr Tan.