Central credit bureau to put cap on borrowing
Senior Minister of State for Law, Indranee Rajah (File Photo)
The total amount of money one can borrow from moneylenders may soon be capped.
A central credit bureau will be set up to place a "universal cap" on borrowing.
This was announced by Senior Minister of State for Law, Indranee Rajah, during the Law Ministry's Committee of Supply debate.
Ms Indranee says her ministry is also re-looking the moneylending regime.
"To this end, we are reviewing the interest rate cap and considering whether there should be further restrictions on the charging of fees by moneylenders."
The Ministry is also considering restricting the number of moneylenders in any geographical location.
But Ms Indranee admits that this move would have limited effectiveness as Singapore is small.
Law Minister K Shanmugam says that a balance is required, in dealing with moneylending.
"If we can take care of all the moneylending issues though legislation, we would have done that long ago. It's not a question of us saying 'We impose caps' and saying 'We do this' and the problems go away. We'll then see them go underground and the unlicensed moneylending problem shoots up. At the end of the day, you have a problem when people need money for whatever reason, sometimes good, sometimes bad, then they are desperate and they'll do whatever is necessary to borrow the money. So let's deal with that. The problem is not the law. The problem is not the lack of caps."
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