SINGAPORE: The Moneylender’s Association wants to play its part in cleaning up the industry.
It supports the government’s plan to look at more measures to further tighten practices which moneylenders adopt to recover loans.
It has also started discussions on setting up an approved debt collecting agency.
President of the Moneylender’s Association, David Poh Cheng Seng, said those who take loans may not always be prompt in their repayments.
Hence, there is a need to take steps to recover the monies and interests.
But some debt collectors may go overboard with their tactics.
Mr Poh said: "We did receive complaints that there are harassment, going down to their offices where they work to collect money. We as an association try to discourage and do it more professionally rather than harass them in the workplace and embarrass (them). I also received complaints that in front of their family, the house and the children, that also shouldn’t be done in a harassment way."
Singapore’s Registry of Moneylenders said common complaints on debt collection include multiple calls made to the borrower and the pasting of letters of demand at the borrower’s home.
The Registry said it will review each complaint, and where there are possible breaches of the law, such as resorting to violent behaviour in recovering debts, it will refer the matter to the police.
And should the moneylender in question be found to have committed an offence, his licence may be suspended, not renewed or revoked by the Registry.
However, the Registry said since 2010 till the middle of this year, none of the licenses revoked or suspended has been due to debt collection practices.
They were mainly pertaining to cases where the licensees were conducting their businesses in an improper or unsatisfactory manner.
The Registry said common breaches include contravention of the unsecured credit rules, the failure to explain to the borrower the terms and conditions of the loan and failure to provide the borrower with copies of the loan documents.
In 2010, there were three suspensions and four revocations of licences; in 2011, there were five suspensions and two revocations of licences and this year till the end of July, there were two suspensions and two revocations of licences.
The Association has already taken a step to weed out the bad hats.
Its started talks with DP Info Systems to appoint an approved debt collecting agency.
The Moneylender’s Association of Singapore has also given suggestions to the Law Ministry to consider introducing a paid—up capital for moneylenders like those similar for banks and finance companies.
The Association feels that such a paid—up capital will ensure that only the genuine players are in the industry.
The Association is looking at between S$100,000 to S$200,000 as paid up capital.
Mr Poh said: "Currently we have proprietor partnership without any paid up, you can have a licence and do anything you want. This doesn’t look good compared with finance companies and banks. We also play a very important role where small time businessmen, blue collar job (workers), they need this moneylending rather than bank, they don’t get credit easily, we moneylenders will fit in this role."
For the longer term, the Association plans to streamline its membership numbers and ensure that licences are granted only to the genuine players.
Membership now stands at 250 and Mr Poh feels 200 will be a better number for the industry.
Mr Poh added that the Association’s objective is to shape the moneylending industry in Singapore into one that is respectable and viewed upon as an "aider" for those in dire need of financial assistance.
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