Debated in Parliament on 5 Aug 2014.
Dr Intan Azura Mokhtar asked the Minister for Law in the past five years (a) how many Singaporeans borrowed from licensed moneylenders annually; (b) what was the average
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loan amount for each borrower; and (c) what was the average age of the borrowers.
Mdm Speaker, we have data on the number of borrowers over the past two years. In 2012, 33,071 borrowers took loans from licensed moneylenders. This number was 34,370 in 2013. The Registry of Moneylenders does not maintain data on the nationality or age profile of the borrowers.
The total amounts borrowed in 2012 and 2013 were $346 million and $478 million respectively. The total number of loans taken in 2012 and 2013 was about 264,000 and 331,000 respectively. These include a small number of loans taken by companies. Thus, the average loan amount per loan taken in 2012 was about $1,300 and, in 2013, it was about $1,400.
Computing the average loan amount per borrower based on the data that we have may not adequately reflect a borrower's overall indebtedness to moneylenders because, for instance, some borrowers may have refinanced loans or taken new loans from different moneylenders to repay earlier loans during the course of the year.
I thank the Senior Minister of State for the reply. Even though the age of the borrowers may not be available, I understand that the minimum age at the moment is 18 years old. Would the Ministry consider putting in the requirement that the minimum age to borrow from moneylenders is 21, in line with financial institutions, to deter younger borrowers from thinking that they can get easier loans from moneylenders rather than from the banks?
My second question is whether the Ministry would consider putting in the requirement to cap the interest rates for both secured and unsecured loans for borrowers whose annual income is above $30,000 because, currently, it is not capped.
Taking the second question first, I think the Member's question was whether or not we would cap the interest rates for those whose annual income is above $30,000. Currently, they are not capped because the thinking is this: those who earn above $30,000 would also have access to other types of credit from financial institutions. In other words, they have options and they are not necessarily driven to borrow from the registered moneylenders. That said, we are reviewing the issue of interest rates and caps. That is something which the Committee that has been set up to look at moneylending issues is looking at, so they can look at that.
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The second question that the Member has raised is about the age. That is something we can ask the Committee to consider as well to see if it is a viable thing to do.
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