Singapore to introduce debt restructuring programme

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Singapore Credit Counselling wants to work with the Moneylenders Association to have a debt restructuring programme in place by next year, which will be beneficial to those facing multiple debts.
Singapore Credit Counselling wants to work with the Moneylenders Association to have a debt restructuring programme in place by next year, which will be beneficial to those facing multiple debts.

Currently, the organisation has a debt restructuring programme with banks, which typically lay down rules such as how much the debtor should pay off his loan each month, at what interest rate, and for how long. There is currently no structured programme for those who borrow from licensed moneylenders and authorities in Singapore are concerned.

About 1% of total consumer credit in Singapore is obtained from moneylenders. The amount may be small, but the real issue is when borrowers turn to multiple lenders out of desperation.

‘Usually for many people, by the time they get to that stage, they would also be in debt with the banks. You may call it the end of a borrowing process. They have now maxed-out with the banks. They then go to the moneylenders, they are maxed-out as well’ stated Kuo How Nam, President of Credit Counselling Singapore.

The challenge is in getting all moneylenders to agree on the terms of this debt restructuring programme. It is not as easy as it sounds, given the 200 or so moneylenders here with very diverse business practices. As it remains Credit Counselling Singapore said it makes sense for the industry to support this proposal.