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Monday 30 November 2009
Gamblers are easy prey
They come from diverse backgrounds - there are teachers, pilots, engineers and even the odd housewife alongside the jobless. But they share one thing in common: They are gamblers faced with mounting debts.
Call for more avenues of help for those who really need to borrow
By Mavis Toh & Leow Si Wan 25 November 2009
They come from diverse backgrounds - there are teachers, pilots, engineers and even the odd housewife alongside the jobless. But they share one thing in common: They are gamblers faced with mounting debts.
After exhausting legal means - banks, credit lines and loans from families and friends - they turn to loan sharks as a last option to get quick cash. But they may soon find it much harder to borrow from these unlicensed money lenders.
On Monday, new laws were proposed to crack down on the burgeoning loan- sharking problem, targeting both syndicates and borrowers.
The illegal money lending scourge has dogged the country since 2005. Loan shark and harassment cases are up, from 10,221 in 2006 to 11,789 last year. The first nine months of this year saw 13,771 cases reported.
Counsellors interviewed said that more than 90 per cent of those who turn to loan sharks are hooked on gambling.
Christian Care Services (CCS) Singapore’s centre director Dick Lum, who works with loan shark borrowers, estimates that only two out of every 20 cases he sees involve non-gamblers.
He recalls a woman who borrowed thousands from loan sharks to buy lingerie. Then there was a man who borrowed to buy brand-name pens and clothes.
‘But most of them are gamblers and when they hit a wall borrowing from banks and friends, they will turn to loan sharks,’ said Mr. Lum, adding that most cases he sees are men in their 40s, with debts of between $10,000 and $40,000.
Added Christian Care Services’ executive director Edward Job: ‘Banks and legal lenders usually have requirements such as a minimum salary.’
It was the inability to meet such strict criteria that forced one borrower, who wanted to be known only as Mr. Wee, to turn to loan sharks.
The 46-year-old said he first turned to illegal moneylenders six years ago after being turned down by a bank. The taxi driver already owed several banks about $20,000 then. He had also borrowed close to $15,000 from friends and did not want his wife and parents to find out about his gambling problem.
He started with a $3,000 loan from one loan shark which snowballed into a $32,000 debt with 12 loan sharks.
‘They were the only ones who would lend me money and I was too ashamed to let my wife know what I had gotten myself into,’ he said. He is still trying pay off his debts.
His tale mirrors that of other gamblers The Straits Times spoke to.
One of them had owed banks about $60,000 and his colleagues more than $300,000 before he turned to loan sharks; he had a gambling habit which tormented him for most of his adult life. Now 40, he started gambling when he was 19.
A young gambler who wanted to be known only as Shawn, 23, had chalked up close to $100,000 in debts to loan sharks.
‘I borrowed twice from licensed moneylenders but they needed a payslip. Also, they won’t give you a loan if you have not settled your existing debt.’
Medical emergencies, business failures and retrenchments are some of the other reasons people are forced to borrow, said Credit Counselling Singapore’s assistant director Tan Huey Min.
On average, most who turn to CCS earn about $2,700 monthly but owe close to $70,000 spread across seven debtors.
CCS has called for a review of Singapore’s current credit policies to consider offering alternatives to individuals with unexpected emergencies.
‘While the interest rate will be probably higher for such loans, it will not be anywhere near to what loan sharks are charging,’ said president Kuo How Nam. Loan shark interest rate stands at about 20 per cent.
Following the proposed harsher punishment, Members of Parliament are also concerned about providing more avenues for those who do need to borrow.
MP Cynthia Phua (Aljunied GRC) said: ‘If we want to control loan sharks, we have to make sure that there are other available avenues for those who want to borrow small sums.’
Recognising the stringent criteria that banks and licensed lenders impose, MP for Marine Parade GRC Seah Kian Peng has suggested setting up a thrift-and- loan structure to help those in need of cash during emergencies. He said: ‘Licensed players can consider simplifying their credit-risk assessment procedures to make things faster.’
When contacted, an OCBC spokesman - the bank provides the FairPrice Plus Personal Loan with NTUC - said that they are ‘studying the feasibility of lowering the requirement’. Currently, the loan requires a minimum income of $30,000.
2 comments:
Gamblers are easy prey
Call for more avenues of help for those who really need to borrow
By Mavis Toh & Leow Si Wan
25 November 2009
They come from diverse backgrounds - there are teachers, pilots, engineers and even the odd housewife alongside the jobless. But they share one thing in common: They are gamblers faced with mounting debts.
After exhausting legal means - banks, credit lines and loans from families and friends - they turn to loan sharks as a last option to get quick cash. But they may soon find it much harder to borrow from these unlicensed money lenders.
On Monday, new laws were proposed to crack down on the burgeoning loan- sharking problem, targeting both syndicates and borrowers.
The illegal money lending scourge has dogged the country since 2005. Loan shark and harassment cases are up, from 10,221 in 2006 to 11,789 last year. The first nine months of this year saw 13,771 cases reported.
Counsellors interviewed said that more than 90 per cent of those who turn to loan sharks are hooked on gambling.
Christian Care Services (CCS) Singapore’s centre director Dick Lum, who works with loan shark borrowers, estimates that only two out of every 20 cases he sees involve non-gamblers.
He recalls a woman who borrowed thousands from loan sharks to buy lingerie. Then there was a man who borrowed to buy brand-name pens and clothes.
‘But most of them are gamblers and when they hit a wall borrowing from banks and friends, they will turn to loan sharks,’ said Mr. Lum, adding that most cases he sees are men in their 40s, with debts of between $10,000 and $40,000.
Added Christian Care Services’ executive director Edward Job: ‘Banks and legal lenders usually have requirements such as a minimum salary.’
It was the inability to meet such strict criteria that forced one borrower, who wanted to be known only as Mr. Wee, to turn to loan sharks.
The 46-year-old said he first turned to illegal moneylenders six years ago after being turned down by a bank. The taxi driver already owed several banks about $20,000 then. He had also borrowed close to $15,000 from friends and did not want his wife and parents to find out about his gambling problem.
He started with a $3,000 loan from one loan shark which snowballed into a $32,000 debt with 12 loan sharks.
‘They were the only ones who would lend me money and I was too ashamed to let my wife know what I had gotten myself into,’ he said. He is still trying pay off his debts.
His tale mirrors that of other gamblers The Straits Times spoke to.
One of them had owed banks about $60,000 and his colleagues more than $300,000 before he turned to loan sharks; he had a gambling habit which tormented him for most of his adult life. Now 40, he started gambling when he was 19.
A young gambler who wanted to be known only as Shawn, 23, had chalked up close to $100,000 in debts to loan sharks.
‘I borrowed twice from licensed moneylenders but they needed a payslip. Also, they won’t give you a loan if you have not settled your existing debt.’
Medical emergencies, business failures and retrenchments are some of the other reasons people are forced to borrow, said Credit Counselling Singapore’s assistant director Tan Huey Min.
On average, most who turn to CCS earn about $2,700 monthly but owe close to $70,000 spread across seven debtors.
CCS has called for a review of Singapore’s current credit policies to consider offering alternatives to individuals with unexpected emergencies.
‘While the interest rate will be probably higher for such loans, it will not be anywhere near to what loan sharks are charging,’ said president Kuo How Nam. Loan shark interest rate stands at about 20 per cent.
Following the proposed harsher punishment, Members of Parliament are also concerned about providing more avenues for those who do need to borrow.
MP Cynthia Phua (Aljunied GRC) said: ‘If we want to control loan sharks, we have to make sure that there are other available avenues for those who want to borrow small sums.’
Recognising the stringent criteria that banks and licensed lenders impose, MP for Marine Parade GRC Seah Kian Peng has suggested setting up a thrift-and- loan structure to help those in need of cash during emergencies. He said: ‘Licensed players can consider simplifying their credit-risk assessment procedures to make things faster.’
When contacted, an OCBC spokesman - the bank provides the FairPrice Plus Personal Loan with NTUC - said that they are ‘studying the feasibility of lowering the requirement’. Currently, the loan requires a minimum income of $30,000.
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