Back on Oct. 7, the Ministry of Manpower (MOM) announced that employers were forbidden from holding on to the salaries of their foreign domestic workers (FDWs), or any other money that belonged to them.
Now, MOM also said that FDWs are not required to seek permission from their employer if they want to borrow money from licensed moneylenders.
According to the Straits Times, MOM’s Senior Parliamentary Secretary Low Yen Ling explained on Nov. 19 why it was not made mandatory for FDWs to seek permission to borrow from licensed moneylenders:
“We are concerned that, if and when we do so, it may well trigger the FDW towards taking more drastic actions such as… borrowing from unlicensed moneylenders.”
Low was speaking in Parliament, responding to a question from MP Darryl David.
Senior Minister of State for Health and Law Edwin Tong said that the police have received 460 reports of harassment of FDWs by illegal moneylenders between 2008 and Sept. 2018.
Licensed moneylenders are not allowed to harass FDWs or their employers for repayment of any loans.
Employers are also not obliged to repay loans taken out by their FDWs. If FDWs fail to repay their loans, they may be liable to civil action just like anyone else.
Tong also revealed that there has been a steep increase in the number of FDWs borrowing from licensed moneylenders.
Sharp rise in FDWs borrowing from licensed moneylenders
In 2016, just 1,500 FDWs did so. This leapt up to about 12,000 in 2017. And about 28,000 FDWs have already done so for the period of Jan. to June 2018.
However, Tong said that the “large majority” of FDWs have repaid their loans from licensed moneylenders.
MOM is open to conducting a study to find out why more FDWs need to borrow money, but Low suggested medical and education bills from their families back home as possible reasons.
For FDWs who go against the rules and borrow from illegal moneylenders, MOM can take action.
MOM will repatriate any work pass holder who does so, and debar them from employment in Singapore, with the period to be determined on a case by case basis.
Top image from Singapore AntiLoan Sharks’ Facebook page.