The proposed loan caps are timely (Borrowers to face stricter cap on moneylender loans; Nov 7, and Stricter loan caps key to keeping lid on debt: VWOs; Nov 10).
In Melbourne, Australia, where I lived and worked for more than half a decade, households that have to dedicate at least one-third of their monthly income towards servicing their borrowings such as mortgage are seen as being susceptible to financial stress.
With this comparison in mind to help put things in perspective, it is not difficult to appreciate why the proposed new loan caps make sense.
The voluntary welfare organisations (VWOs) that help borrowers restructure existing loans and provide financial counselling should be lauded for their efforts.
Additionally, these VWOs could be proactive and spearhead initiatives to prevent Singaporeans from finding themselves in a financial maelstrom.
These VWOs could educate Singaporeans through the sharing of financial best practices, such as avoiding reckless spending, exercising financial prudence instead of always trying to "keep up with the Joneses", and setting aside an emergency reserve to tide over at least six months of unemployment.
Woon Wee Min