85,352 Singapore consumers have overdue unsecured debt totalling $288.4m

Singapore consumers' outstanding unsecured debt continued to rise in the first half of this year, though the latest figures show that their debt exposure may be stabilising, according to a report from Credit Bureau Singapore.
Singapore consumers' outstanding unsecured debt continued to rise in the first half of this year, though the latest figures show that their debt exposure may be stabilising, according to a report from Credit Bureau Singapore. PHOTO: ST FILE

SINGAPORE - Singapore consumers' outstanding unsecured debt continued to rise in the first half of this year, though the latest figures show that their debt exposure may be stabilising, according to a report from Credit Bureau Singapore (CBS) released on Monday (Oct 5).

In June 2015, the number of consumers who missed two or more months of payments on their credit cards, overdrafts or personal loans rose 10 per cent to 85,352 compared to the year-ago period. This also represents a 32 per cent jump from the corresponding number of debtors in 2011.

These debtors make up 5 per cent of the total population of unsecured credit customers.

In tandem, their overdue balances rose to $288,445,498, a 7 per cent rise from the year-ago period and a 74 per cent jump from 2011.

Over the last four years, unsecured debt exposure has also increased, with average balance per consumer for unsecured credit cards and overdrafts rising 16 per cent to $7,971 from 2011 to 2015. However, debt exposure appears to be stabilising in June 2015, when average balance per consumer for unsecured credit cards and overdrafts fell slightly to $7,971 from 2014's $8,018.

However, the average principal sum for unsecured personal loans rose 5 per cent to $13,584.

Said Mr William Lim, CBS' executive director: "While consumers' outstanding debt remains high, we note that average debt exposure for credit cards and overdrafts is stabilising. This may indicate that the measures put in place by both the regulator and banks to help borrowers pay down their debt are beginning to have an effect on the market. CBS will continue to monitor this trend."

In June 2015, the Monetary Authority of Singapore's new rules for credit card and unsecured credit kicked in to help individuals who have already accumulated high levels of debt through credit cards and unsecured credit avoid accumulating further debt. They also help individuals who have difficulties repaying their existing debts avoid getting into further debt.

To help these borrowers, the Association of Banks in Singapore (ABS) also introduced in April 2015 a centralised repayment solution known as the Repayment Assistance Scheme (RAS) to help borrowers reduce their unsecured debt over time.

CBS also introduced the enhanced credit report in December 2014 that displays consumers' aggregate outstanding balances across financial institutions.