Parliament: Making employers' consent mandatory before maids can borrow money may drive them to loansharks, says MOM

The Ministry of Manpower does not plan to introduce measures for foreign domestic workers or moneylenders to obtain employers' permission before loans can be issued.
The Ministry of Manpower does not plan to introduce measures for foreign domestic workers or moneylenders to obtain employers' permission before loans can be issued.PHOTO: ST FILE

SINGAPORE - Making it mandatory for foreign domestic workers (FDWs) to seek their employers' consent before they can borrow from licensed moneylenders may drive them to illegal loansharks.

For this reason, the Ministry of Manpower (MOM) does not plan to introduce measures for FDWs or moneylenders to obtain employers' permission before loans can be issued, said its Senior Parliamentary Secretary, Ms Low Yen Ling, on Monday (Nov 19).

"We are concerned that, if and when we do so, it may well trigger the FDW towards taking more drastic actions such as... borrowing from unlicensed moneylenders," she said.

Ms Low was responding to a suggestion made in Parliament by Mr Darryl David (Ang Mo Kio GRC) for employers' consent to be sought before maids can borrow from licensed moneylenders.

He was drawing parallel to a self-exclusion framework in which family members can apply to exempt an individual from entering casinos here.

Under new rules announced in October, all Singaporeans and foreigners will be able to apply to be self-excluded in borrowing from licensed moneylenders. But there is no provision for third-party application to exclude others.

The growing number of foreign domestic workers borrowing from licensed moneylenders over the past few years has triggered concerns among many, especially employers.

 
 
 
 

In 2017, about 12,000 maids borrowed money from licensed moneylenders, a jump from the 1,500 maids who borrowed in 2016. Already, 28,000 maids have borrowed money between January and June 2018.

Releasing the figures in Parliament in response to questions posted by Mr David and Mr Sitoh Yih Pin (Potong Pasir), Senior Minister of State for Law and Health Edwin Tong said "the large majority of FDWs have repaid their loans from licensed moneylenders."

He added that between 2008 and September 2018, the police received about 460 reports of harassment by unlicensed moneylenders that came from FDWs borrowing or acting as guarantors.

Employers are not liable to repay their FDWs' loans, said Ms Low, pointing out that FDWs who do not repay their loans may be subject to civil action by licensed moneylenders, as with any other borrowers.

Licensed moneylenders are not allowed to harass FDWs who borrowed from them or their employers for repayment, Ms Low added, advising employers who had been harassed to go to the police.

Ms Low, who is also SPS for Education, pointed out that the MOM will repatriate work pass holders who had borrowed money from unlicensed moneylenders and debar them from working in Singapore.

Their employers will be informed too, she said, adding that the debarment period will be determined by the case facts. The MOM had announced the debarment rule in October.

Mr Louis Ng (Nee Soon GRC) asked if MOM knew the reasons for why FDWs borrow money so that the government can better address the root cause.

Pointing out that the common reasons include unforeseen medical bills and children's college bills from the FDWs' families back home, Ms Low said the MOM is open to conducting a further study into the issue.