Moneylending Measures Announced
On July 15, 2019, the Ministry of Law (MinLaw) announced new measures to address the increasing issue of moneylending activities targeting foreigners, including Maids or Migrant Domestic Workers (MDWs). These measures aim to combat exploitative practices and protect vulnerable individuals from falling into debt traps. Stricter regulations, enhanced enforcement actions, and public education campaigns are key components of these measures. MinLaw’s efforts underscore the government’s commitment to safeguarding the financial well-being of all residents, including foreign workers, and disrupting the operations of illegal moneylenders.
Click Here for more
Borrowing Cap Set at $500 for Maids Earning Below $10,000 Annually
Effective immediately, licensed moneylenders are subject to new regulations limiting the maximum borrowing amount for Maids earning less than $10,000 annually to $500. This measure aims to protect vulnerable individuals from excessive debt burdens and ensure responsible lending practices within the industry.
Educating Maids On Money Management
Both Employment Agencies and Employers of Migrant Domestic Workers (MDWs) have a crucial role in educating MDWs on the importance of proper money management.
Advocate Proper Money Management
Constant education and reminders are essential to help MDWs understand the importance of spending wisely and saving consistently. Employers can engage in conversations with their Domestic Helpers to assess their financial situation and recommend professional help if needed.
Borrowing Money Comes with a Hefty Price Tag
MDWs should avoid borrowing money whenever possible, as it often incurs significant costs. For instance, borrowing just $500 from a licensed moneylender could result in paying up to $500 in interest and fees.
Maids Must Steer Clear of Unlicensed Moneylenders & Their Activities
MDWs need to recognize and disregard offers from unlicensed moneylenders, particularly through social media, phone calls, or text messages. Associating with unlicensed moneylenders can lead to severe consequences, including being barred from employment in Singapore.
Seek Assistance if Struggling with Debt
Encourage MDWs to seek assistance from Voluntary Welfare Organisations (VWOs), the Migrant Workers’ Centre, or the Centre for Domestic Employees if they are facing financial difficulties. These organizations can offer valuable support and guidance to help MDWs overcome their financial challenges.
Apply For Self-Exclusion from Borrowing From Licensed Moneylenders
Inform MDWs about the new self-exclusion facility provided by MinLaw and guide them through the process of opting for it. This facility can assist in managing their finances effectively and preventing further indebtedness, safeguarding MDWs from falling into a cycle of debt and financial instability.
How Maids Can Apply for Self-Exclusion from Moneylending
Self-Exclusion is a voluntary commitment for Maids to refrain from borrowing from licensed moneylenders in Singapore for a minimum of 2 years, with no option to lift the exclusion even in urgent situations.
Application Process:
SingPass ID Requirement: Your Maid will need a SingPass ID to apply for self-exclusion. Alternatively, you can assist her in applying using your SingPass as a third party.
Download Authorisation Form: Download the Authorisation Form for your Maid to sign, declaring that she understands the implications of self-exclusion.
Submission: Submit the application at https://www.mlcb.com.sg/exclusion.html.
Registration Fee:
SGD $3 for Self-Registration
SGD $5 for Registration by Employer
If you require assistance to help your maid set up a SingPass Account, you can access a step-by-step guide here.
Guidance on Hiring a Maid: Further Insights Needed?
Prevention is Key: Educating Your Domestic Helper on Financial Management and Avoiding Moneylending Pitfalls.
At Greatlink, we believe that prevention is always better than cure. We hope you find this guide useful in educating your Domestic Helper on effective financial management and the dangers of engaging with moneylenders.
Should you require any of our Maid Services, feel free to visit any of our 5 Branch Offices or contact us at Greatlink. We’re here to assist you!
