01-11-2011, 07:06 AM
The Straits Times
Nov 1, 2011
CLIENTS OF MONEYLENDERS
They are all in debt
Licensed moneylenders here each give out between 100 and 150 loans a month. Just who are the people who go to moneylenders? Lin Wenjian finds out.
THE majority of those who borrow from licensed moneylenders here are men from their 20s to their 50s.
Among them are blue-collar workers earning between $1,800 and $2,200 a month, as well as senior professionals, said Mr Wayne Ng, 27, who runs Sands Credit in Golden Landmark Shopping Complex.
Moneylenders The Straits Times spoke to said they each give out between 100 and 150 loans a month, mostly to borrowers who have exhausted all other avenues of credit, including the banks.
These borrowers turn to moneylenders because of one or more of the following reasons:
•a failed business;
•overspending;
•a gambling addiction; or
•hard-luck circumstances such as retrenchment or a sudden illness in the family.
The reports below highlight examples of such cases. The individuals' names have been changed.
Sands Credit's Mr Ng, who is also the assistant secretary of the Moneylender's Association of Singapore, said many debtors continue borrowing despite having little or no means of repaying what they already owe.
He said: 'I've come across people who told me they have no intention of repaying their loans. They tell me, 'You are licensed, so at most, you can only sue me for bankruptcy.''
To weed out such people, he screens each borrower and requires them to state their financial commitments in black and white before he decides whether to lend them the money.
'I reject about half of all applications because I am not convinced they have the means to repay the loan,' he said.
Even then, up to a fifth of his clients default on their payments every month, which eats into his profits, he said.
Mr C. Ang, 33, who runs his moneylending business in Chinatown, said that on average, about 10 per cent of his clients abscond after getting loans from him.
'They refuse to take my calls; some even move to avoid me,' he said.
Mr Ng said he refrains from intimidating borrowers who do not pay up.
He said: 'I try to contact them. And when I do, I restructure their debts, so they repay less every month, but increase their loan tenure.'
wenjian@sph.com.sg
-----------------------------
The Gambler
PART-TIME rag-and-bone man Deepak, 35, takes home between $500 and $800 a month, out of which $100 goes to his mother.
The rest are for his personal expenses, but creditors are after him for $700 a month.
Having dug himself into debt from online football betting, he turned to licensed moneylenders to feed his habit, to repay bookies and to supplement his erratic income. He has lost count of the number of people to whom he owes money.
Deepak's money troubles started two years ago, when he opened an account with a website that let him place bets on the outcomes of European football matches, using credits given to him.
He started out wagering $50 or $100 per match and progressed to betting 'hundreds' each time. His losses added up. His biggest loss, run up in one night, was $7,000.
Deepak estimates his debts now stand at close to $10,000. He admits he is unlikely to be able to make good on these debts soon.
'Unless I find a job that pays me $3,000 a month, or strike 4-D,' the bachelor said wistfully, adding: 'If not, it's very hard.'
Of the $700 he is supposed to pay every month, he said, laughing with resignation: 'You tell me, how to pay?'
It is only by providence that he does not have to pay rent. He lives with his mother in a fully-paid-for three-room flat handed down by his father, who died following a stroke four years ago.
Asked what he plans to do to clear his debt, he paused and then replied: 'I really don't know. I pay what I can and if they want to chase me, I can't do anything.'
He said he has not placed a single bet in the last year.
---------------------------------------------
The hard-luck case
MECHANICAL engineer Mohamed, the middle of three children and the only son, has been bearing the burden of supporting his parents and sisters for some years now.
The 27-year-old's situation was most dire two years ago, when his parents, in their 50s, were too ill to work, and both his sisters were studying.
With a take-home pay of $2,000 a month at that time, he had to foot the $2,300 in rent for the family's four-room flat.
He declined to elaborate on how the family got into that situation.
With rent and bills to cover, he turned to banks' unsecured credit lines every month.
To add to his problems, the bachelor ran up more than $20,000 in losses from his online forex trading account. He also owed friends money from ad hoc loans he took from them to tide him over.
To make the monthly minimum payments to banks, which were sending him letters of demand, he went to licensed moneylenders for a $3,000 loan in 2009.
Although he has since paid off what he owed them, he is still paying about $950 every month to the banks.
Credit Counselling Singapore, which helps those with financial problems, has stepped in to restructure his loans.
Some responsibility has been taken off him because his parents have since begun running a shop selling clothes, and his sisters have started working.
The family now takes care of the rent.
'They know I am repaying my loans, so they pay the rent,' he said.
---------------------------------------
The failed entrepreneur
IN 2008, Mr S.K. Chew took a loan of $10,000 from three licensed moneylenders to buy construction materials to expand his renovation business. Then the economy went into a stutter.
He said in a mix of Mandarin and Hokkien: 'Nobody wanted to renovate their homes with the bad economy, and subcontractors didn't buy anything from me as they also had no projects, so I ended up with the unused materials in my office.'
Worse, he was faced with spiralling interest of between 15 per cent and 30 per cent a month from his loans.
Three years on, Mr Chew, now a house painter and relief taxi driver, is still trying to recover from that wrong turn he took.
The 57-year-old has been working more than 12 hours a day, with nearly all of his $2,000 income going into repaying his loans, leaving him only $300 a month for his expenses.
His wife sews clothes at home to help out; their two university-going daughters work part-time to put themselves through school.
The family also downgraded from a Housing Board maisonette to a three-room flat in Lorong Ah Soo.
Mr Chew said he has 'less than $2,000 including interest' of his loan unpaid, and is confident he will be debt-free by March.
Nov 1, 2011
CLIENTS OF MONEYLENDERS
They are all in debt
Licensed moneylenders here each give out between 100 and 150 loans a month. Just who are the people who go to moneylenders? Lin Wenjian finds out.
THE majority of those who borrow from licensed moneylenders here are men from their 20s to their 50s.
Among them are blue-collar workers earning between $1,800 and $2,200 a month, as well as senior professionals, said Mr Wayne Ng, 27, who runs Sands Credit in Golden Landmark Shopping Complex.
Moneylenders The Straits Times spoke to said they each give out between 100 and 150 loans a month, mostly to borrowers who have exhausted all other avenues of credit, including the banks.
These borrowers turn to moneylenders because of one or more of the following reasons:
•a failed business;
•overspending;
•a gambling addiction; or
•hard-luck circumstances such as retrenchment or a sudden illness in the family.
The reports below highlight examples of such cases. The individuals' names have been changed.
Sands Credit's Mr Ng, who is also the assistant secretary of the Moneylender's Association of Singapore, said many debtors continue borrowing despite having little or no means of repaying what they already owe.
He said: 'I've come across people who told me they have no intention of repaying their loans. They tell me, 'You are licensed, so at most, you can only sue me for bankruptcy.''
To weed out such people, he screens each borrower and requires them to state their financial commitments in black and white before he decides whether to lend them the money.
'I reject about half of all applications because I am not convinced they have the means to repay the loan,' he said.
Even then, up to a fifth of his clients default on their payments every month, which eats into his profits, he said.
Mr C. Ang, 33, who runs his moneylending business in Chinatown, said that on average, about 10 per cent of his clients abscond after getting loans from him.
'They refuse to take my calls; some even move to avoid me,' he said.
Mr Ng said he refrains from intimidating borrowers who do not pay up.
He said: 'I try to contact them. And when I do, I restructure their debts, so they repay less every month, but increase their loan tenure.'
wenjian@sph.com.sg
-----------------------------
The Gambler
PART-TIME rag-and-bone man Deepak, 35, takes home between $500 and $800 a month, out of which $100 goes to his mother.
The rest are for his personal expenses, but creditors are after him for $700 a month.
Having dug himself into debt from online football betting, he turned to licensed moneylenders to feed his habit, to repay bookies and to supplement his erratic income. He has lost count of the number of people to whom he owes money.
Deepak's money troubles started two years ago, when he opened an account with a website that let him place bets on the outcomes of European football matches, using credits given to him.
He started out wagering $50 or $100 per match and progressed to betting 'hundreds' each time. His losses added up. His biggest loss, run up in one night, was $7,000.
Deepak estimates his debts now stand at close to $10,000. He admits he is unlikely to be able to make good on these debts soon.
'Unless I find a job that pays me $3,000 a month, or strike 4-D,' the bachelor said wistfully, adding: 'If not, it's very hard.'
Of the $700 he is supposed to pay every month, he said, laughing with resignation: 'You tell me, how to pay?'
It is only by providence that he does not have to pay rent. He lives with his mother in a fully-paid-for three-room flat handed down by his father, who died following a stroke four years ago.
Asked what he plans to do to clear his debt, he paused and then replied: 'I really don't know. I pay what I can and if they want to chase me, I can't do anything.'
He said he has not placed a single bet in the last year.
---------------------------------------------
The hard-luck case
MECHANICAL engineer Mohamed, the middle of three children and the only son, has been bearing the burden of supporting his parents and sisters for some years now.
The 27-year-old's situation was most dire two years ago, when his parents, in their 50s, were too ill to work, and both his sisters were studying.
With a take-home pay of $2,000 a month at that time, he had to foot the $2,300 in rent for the family's four-room flat.
He declined to elaborate on how the family got into that situation.
With rent and bills to cover, he turned to banks' unsecured credit lines every month.
To add to his problems, the bachelor ran up more than $20,000 in losses from his online forex trading account. He also owed friends money from ad hoc loans he took from them to tide him over.
To make the monthly minimum payments to banks, which were sending him letters of demand, he went to licensed moneylenders for a $3,000 loan in 2009.
Although he has since paid off what he owed them, he is still paying about $950 every month to the banks.
Credit Counselling Singapore, which helps those with financial problems, has stepped in to restructure his loans.
Some responsibility has been taken off him because his parents have since begun running a shop selling clothes, and his sisters have started working.
The family now takes care of the rent.
'They know I am repaying my loans, so they pay the rent,' he said.
---------------------------------------
The failed entrepreneur
IN 2008, Mr S.K. Chew took a loan of $10,000 from three licensed moneylenders to buy construction materials to expand his renovation business. Then the economy went into a stutter.
He said in a mix of Mandarin and Hokkien: 'Nobody wanted to renovate their homes with the bad economy, and subcontractors didn't buy anything from me as they also had no projects, so I ended up with the unused materials in my office.'
Worse, he was faced with spiralling interest of between 15 per cent and 30 per cent a month from his loans.
Three years on, Mr Chew, now a house painter and relief taxi driver, is still trying to recover from that wrong turn he took.
The 57-year-old has been working more than 12 hours a day, with nearly all of his $2,000 income going into repaying his loans, leaving him only $300 a month for his expenses.
His wife sews clothes at home to help out; their two university-going daughters work part-time to put themselves through school.
The family also downgraded from a Housing Board maisonette to a three-room flat in Lorong Ah Soo.
Mr Chew said he has 'less than $2,000 including interest' of his loan unpaid, and is confident he will be debt-free by March.