Find out why maids are having to resort to illegal moneylenders

Mr Koh Yee Boon suggested that the Ministry of Manpower allow employers to hold on to the work permits of their foreign domestic workers (FDWs) to prevent them from engaging in moneylending activities (Put a stop to maids borrowing from moneylenders; May 23).

This move will further constrain the FDWs, who have already limited basic rights in Singapore. Also, the work permit is one of the few identification documents the FDW has to prove her legal status here.

While FDWs increasingly falling prey to loan sharks is an alarming concern for employers as the law also holds them accountable for their employees' well-being, we must consider the root causes.

Why are FDWs approaching illegal moneylenders in the first place?

Loan sharks operate under the cover of informal social networks, which FDWs tend to rely on as their first, and possibly only, source of social support while working here.

Deputy Public Prosecutor Zhou Yihong pointed out in 2016 that FDWs lack "ready access to legal sources of funds", which enables loan sharks to charge them exorbitant interest rates (Jail, fine for loan shark who preyed on Filipino maids; Dec 10, 2016).

However, there remains limited information about why FDWs contact loan sharks, apart from the rare cases that have been disclosed.

I propose that MOM investigates the compliance rates and potential loopholes in existing regulations affecting an FDW's financial situation, such as late salary payments and overcharged employment agency fees, as these may be some reasons behind the moneylending problem among FDWs.

Instead of having more draconian measures imposed on FDWs, the problem of moneylending among FDWs should be studied and tackled as part of the larger socio-political environment that affects their financial well-being.

Thian Si Ying (Ms)

A version of this article appeared in the print edition of The Straits Times on May 31, 2018, with the headline 'Find out why maids are having to resort to illegal moneylenders'. Print Edition | Subscribe