Singaporeans mired in debt? – 65,804 loan sharking cases last 4.5 years.

More seek debt counseling

I refer to the articles “More seeking help on debt problems” (Channel NewsAsia, Dec 22) and “Proposed changes to credit cards and unsecured credit rules” (Channel NewsAsia, Dec 21).

The former article states that “More people are seeking help from Credit Counselling Singapore (CCS) on their debt problems.

In the first six months of this year, more than 700 people sought help from the organisation.

This is an increase of 40 per cent, compared to about 500 people who sought help in the same period last year.”

Credit card debt rose 10%

According to the Monetary Authority of Singapore’s (MAS) web site , the Rollover Balance on credit cards increased by about 10 per cent, from $4.5 billion in November 2011 to $5 billion in September 2012.

Bad debts written-off increase 52%?

Bad Debts Written-Off (in one month) and the Charge Off Rate (% – Charge-off rate for the year is defined as the bad debts written off during the year divided by the average rollover balance for the same year. As monthly charge-off rates tend to be too volatile, we have chosen to publish quarterly charge-off rates instead), increased from $13.2 to $20.1 million and 4.0 to 5.1 per cent, respectively, in the same period.

This means that Bad Debts Written-Off increased by 52 per cent, comparing the latest month of September 2012 to November 2011.

1 in 8 defaulted at least once?

According to the Consumer Credit Bureau’s media release on 29 March 2012, the delinquency rate of consumers who missed at least one payment on one or more of their credit card accounts in 2011 was 12.55 per cent.

Does this mean that about one in eight consumers defaulted by not paying their credit bills for at least one month?

With the total number of credit cardholders rising 6 per cent to 1.29 million in 2011, does it mean that about 161,895 credit cardholders were delinquent?

Average balance increase 10%?

The average balance per consumer also increased by 10 per cent from $4,377 to $4,801, from 2009 to 2011.

Consumer loans increase 34%

According to the Department of Statistics, Consumer Loans have increased by 34 per cent from $151.5 to $201.4 billion, from 2010 to October 2012.

Pawn shop loans may increase by 185%?

Pawn shop loans have increased by its greatest margin ever in history. 

The amount of loans given out increased from $2.7 billion in 2010 to $4.9 billion in 2011, and $639.9 million for the month of August 2012.

At the current near all-time record high of $639.9 million in just one month, the total in a year may hit $7.7 billion, which may then be a whopping increase of 185 per cent from 2010.

How many affected by loan sharks?

The total number of unlicensed moneylending and harassment cases from 2008 to June 2012 was 65,804 (11,800, 18,600, 16,834, 13,342 and 5,228 in 2008, 2009, 2010, 2011 and first half 2012, respectively). (“33 suspected of loan shark activities netted in police raid”, Today, Apr 7, 2010)

With a total of 65,804 cases over the last four and a half years, how many loan sharking cases are there in total, as the statistics are only for reported cases?

If we assume that every loan sharking activity affects one household, how many households in Singapore have been affected by loan sharks?

In this connection, we welcome the appearance of full-page advertisments in the newspapers on 1800XAhLong to step up enforcement against loan sharks.

Leong Sze Hian

About the Author

Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.