Requiring maids to get employers' permission to take loans may backfire: MOM

While about 1,500 FDWs had turned to licensed moneylenders in 2015, this figure increased to 12,000 for 2017 and 28,000 between January and June this year. (PHOTO: Getty Images)

The Ministry of Manpower (MOM) has no plans to make it mandatory for foreign domestic workers (FDWs) to obtain their employers’ permission to borrow from licensed moneylenders.

“We are concerned that if and when we do so, it may well trigger the FDWs towards taking more drastic actions, such as… borrowing from the unlicensed moneylenders to avoid telling their employers,” said MOM Senior Parliamentary Secretary Low Yen Ling on Monday (19 November).

The 44-year-old Chua Chu Kang GRC Member of Parliament (MP) was responding in Parliament to a question from Ang Mo Kio GRC MP Darryl David, who had suggested the imposition of such a ruling.

He also asked if FDWs who have previously borrowed from unlicensed moneylenders and have been sent home could be put on a watchlist or barred from returning to Singapore, so as to “avoid further inconveniences down the road”.

To this, Low replied that, come next year, debarment measures will be implemented for such FDWs following a period of education and communication with FDWs, employers and other stakeholders.

She assured the House that MOM’s efforts to educate new FDWs on the importance of money management, as well as the risks and implications of over-borrowing and borrowing from unlicensed moneylenders.

Sharp rise in legal borrowing

Earlier in the session, Senior Minister of State for Law and Health Edwin Tong shared figures showing a sharp increase in FDW borrowing from licensed moneylenders.

While about 1,500 FDWs had turned to licensed moneylenders in 2015, this figure surged to 12,000 for 2017 and 28,000 between January and June this year. Tong noted that the majority of FDWs have repaid their loans from licensed moneylenders.

Similarly, Tong said more foreigners residing in Singapore, including FDWs, have borrowed from unlicensed moneylenders, according to the police.

Since October, two measures have been announced by the Law Ministry to better protect foreigners residing in Singapore from the effects of over-borrowing, he added.

These include introducing aggregate loan caps on the total amount that foreigners here can borrow from licensed moneylenders and allowing them to apply for self-exclusion from using such services.

Why the need to borrow?

Nee Soon GRC MP Louis Ng also asked whether the government had looked into the reasons why FDWs have to turn to moneylenders.

Low replied that anecdotal evidence suggested that FDWs take out such loans to “tide through certain requests from home”, such as medical bills or paying for their children’s school fees.

“We are thinking through (the matter) and will certainly consider mounting a study to understand a bit more about this (issue),” she said.