Debated in Parliament on 9 Sep 2014.
Mr Christopher de Souza asked the Deputy Prime Minister and Minister for Home Affairs whether the current licensing regime for moneylenders has been effective in reducing the rate of unlicensed moneylending-related harassment cases against debtors and innocent neighbours of debtors.
Mdm Speaker, for the six-month period between January and June 2014, there were 3,235 reported cases of unlicensed moneylending (UML) and UML-related harassment. This is 31.6% lower than the 4,729 cases reported in the same period in 2013. The number of reported cases has been declining steadily since 2010.
The improvement in the UML situation can be attributed to the tough laws enacted, strong enforcement efforts against loanshark syndicates and the high level of community support in the fight against UML activities. Another factor is the presence of licensed moneylenders who provide access to credit for borrowers who are unable to obtain credit from banks or financial institutions and who might otherwise turn to UMLs.
However, there have been cases of loansharks operating under the cover of licensed lenders. Two cases uncovered in recent years have been charged in Court and convicted for UML-related offences. Police will continue to work with the relevant agencies to monitor the activities of licensed moneylenders.
I thank the Senior Minister of State for the encouraging statistics – a reduction of 31.6% over the last six months. I would like to ask a clarification in relation to licensed moneylenders. I have seen quite a number of residents with debts owed to licensed moneylenders, and these moneylenders, as the Senior Minister of State alluded to in his response, sometimes harassed them at the door, at the office, through many phone calls, in order to recover the debts. Can there be more done to eyeball the licensed moneylenders who may be carrying out the tactics of unlicensed
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moneylenders, in terms of harassment, because I do see my residents having this experience?
Licensed moneylenders may take reasonable and legal steps to recover their debts. They must not infringe the laws. This could include contacting the borrowers to ask them to return the loan, or taking legal action to enforce the loan contract. However, as to the concerns raised by the Member, we know some moneylenders do resort to such tactics that the Member has alerted us to. Our point is that moneylenders cannot resort to harassment, vandalism, violence or threatening behaviour when recovering debts – the very things that we try to avoid from unlicensed moneylenders. Borrowers who encounter such behaviour should report the matter to the Police for investigation. Indeed, if we find them committing such offences, they will have their licences suspended, or not renewed or revoked by the Registry of Moneylenders.
The Member might be happy to note that in June this year, MinLaw formed an advisory committee to review the moneylending regulatory regime and will recommend appropriate measures to strengthen it, including the debt collecting practices.
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