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15 Aug 2019
Monetary Authority of Singapore
Suggestion View - 103
Review loans to foreign workers

The Monetary Authority of Singapore has recently introduced some restrictions on loans given to foreign workers by money lenders. These restrictions do not appear to work, as the number of loans continue to increase.

Some people are calling for a total ban on these loans. 

I carried out a poll. 72% of the participants preferred a ban while 28% preferred to leave the decision to the market. 

It will be harsh to impose a total ban, as there may be cases where there is a real need for the loan.

I suggest that a loan may be granted to a foreign worker provided it has the approval of the employer. 

There are reasons to give this right to the employer:

a) If the foreign worker is not able to repay the loan or faced financial stress, there is a risk that the worker may steal from the employer or the work performance may be affected.

b) Before giving approval, the employer may be able to check the interest rate and repayment terms are fair to the foreign worker.

I hope that the regulator will consider this approach.

Tan Kin Lian

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