Licensed moneylenders face further restrictions with regards to loan limits for foreign workers
An announcement made by the Ministry of Law on July 15th revealed that low-income foreign workers in Singapore would only borrow up to S$500 from licensed moneylenders. Eight months earlier, the government had decreed that these workers could take a maximum of S$1,500 loan from a licensed moneylender. This limit was reduced in a bid to curb a surge in borrowing over the past 3 years.
The new rules apply to all foreign workers with a gross income of less than S$10,000 annually, and it’s likely to impact domestic workers widely. Besides, the Ministry of Law also revealed other set of restrictions that all licensed moneylenders must abide with.
More loan restrictions for foreigners in Singapore
The new rules ban licensed moneylenders from;
- Targeting low-income foreign workers when advertising their credit services.
- Accepting foreign nationals as guarantors for borrowers.
- Cross-referencing borrowers to one another.
- Offering loans brokered by individuals who don’t have the necessary authorization.
From August 15th, all licensed moneylenders were prohibited from;
- Lending money to over 300 foreigners at one time.
- Lending over S$150,000 in total to foreign nationals at one time.
- Lending to over 15 foreign nationals in one month.
- Lending money to more than 50 foreign nationals in one year.
If a moneylender violated these laws before they took effect, they wouldn’t be subjected to penalties. But they’ll not be allowed to continue advancing credit services to foreigners until their loan records have dropped to a level that adheres to the set limits. Additionally, lenders can’t offer their credit services to people who applied for self-exclusion to the MCB (Moneylenders Credit Bureau).