Singapore Moneylenders Credit Bureau to Launch in 2016.

Singapore Moneylenders Credit Bureau Launch in 2016

 It’s official! Things are set to change in the moneylending industry in Singapore. Licensed moneylenders like us at Empire Global will face stricter rules from the government. The Singapore Ministry of Law (MinLaw) has appointed DP Information Group (DP Info) to run the Moneylenders Credit Bureau (MLCB).

The much talked about Moneylenders Credit Bureau will need all licensed moneylenders to provide information on their loans and the borrowers repayment details. This was announced after the 4% interest rate cap.

Individuals used to be able to take up multiple loans from different moneylenders, without proper checks conducted on their repayment ability. Most of the time, it depends on the loan officer assessment of the borrower. Now, with the implementation of the Moneylenders Credit Bureau, licensed moneylenders will get the latest information of the borrower’s credit risk and their debt servicing ratio. This allows a better assessment of the borrower’s loan situation and ensure that borrowers do not borrow beyond their repayment ability.

We do understand the government standing on this as it primarily educates the borrowers on a larger scale. We have rejected borrowers before just by assessing their current withstanding loans. We also support this movement as this provides a safety net for businesses like us in the moneylending industry as this will prevent a percentage of borrowers who could not repay their debts from over borrowing. Financial institutions and licensed moneylenders would not want to overwrite bad debts as it leads to high overheads.

Moneylenders avoid over borrowers from getting loans with Credit Bureau

Moneylenders avoid over borrowers from getting loans with Credit Bureau

Moneylenders Credit Bureau in Singapore

The main goal of the Moneylenders Credit Bureau is to protect borrowers. This was due to many complaints from the public on errant companies making borrowers lending money beyond their means. Errant companies also charge overly high interest rates leading to borrowers being unable to repay.

Licensed moneylenders benefit from this new Act, as they can now tap onto the information by the Moneylenders Credit Bureau to affirm their loan assessment.

This will curb excessive borrowing and “help debtors to keep their loan commitments at a more manageable level”, DP Info said.

“We’ll be able to know how much a borrower has borrowed from other moneylenders, so that we won’t over-extend the loan,” said Mr Peter Tan, vice-president of the Moneylender’s Association of Singapore.

Statements from DP Info

Said Lincoln Teo, chief operating officer of DP Info: “The information provided will help promote responsible borrowing. The transparency also means that individuals, when seeking to buy a credit product from a moneylender, will be more likely to take their personal and financial circumstances into account when making their decision. This initiative will eventually see a reduction in the number of defaults. The introduction of the Moneylenders Credit Bureau brings us even closer to a holistic assessment of a borrower’s credit worthiness and repayment abilities.”

“Coupled with our other bureaux and through DP Info’s sophisticated technology, we hope to provide the licensed moneylending community with more data and information to make better decisions. The information will help promote responsible borrowing.”

“This initiative will eventually see a reduction in the number of defaults.”

DP Info currently operates two other credit bureaus – the DP Credit Bureau and the DP SME Commercial Credit Bureau. Read more on DP Info announcement on the new ruling of the Moneylenders Credit Bureau.

Licensed Moneylending News

27 Nov 2015: With the Credit Bureau, has now benefited welfare organisations.Two voluntary welfare organisations (VWOs)- Blessed Grace Social Services and Adullam Life Counselling – can now, with a borrower’s consent, refer to a credit bureau to get a clearer picture of his/her credit records. This is from a new memorandum of understanding signed between VWOs and the Moneylender’s Association of Singapore (MLAS) and DP Information Network.

These VWOs, work as mediators between debtors and licensed moneylenders as they work out structured repayment programmes agreeable to affected parties.

The DP SME Commercial Credit Bureau contains over 15million payment records of Singaporeans and Singapore businesses. This information can be accessed by the VWOs, and the information is gathered monthly from bureau members.

MLAS president Peter Tan said: “We hope that by working together with the VWOs, most debtors will be able to settle their debts in a restructured repayment scheme.”

Budget 2014 Singapore and how it affects money lenders and borrowers

Budget 2014 Singapore for Moneylenders & Borrowers

Budget 2014 Singapore. How does it affect a borrower? 

Bishan – The no. 1 important question in the most anticipated current affairs of Singaporeans and businesses in Singapore. From the wage workers to the highest salaried white collar people. From small businesses (SMEs) to large corporations (MNC). Budget 2014 Singapore affects everyone in every way.

This is why we have this special article on Budget 2014 Singapore . How it affects us as borrowers and money lenders alike   in Singapore. Singapore’s Law Ministry new plans this year’s Budget 2014 Singapore. In order to avoid unlicensed  moneylenders from exploiting lenders, here are some of the measures in place this year.

  • The Singapore Law Ministry intends to establish a new central credit bureau. This bureau will allow “tighter controls” over the total amount of unsecured credit an individual can borrow.

  • A review of the interest rate cap and considerations on further restrictions on fee charges (early redemption, loan termination charges)

  • A new regime that will allow bankrupts to be discharged within clear timeframes.

Here’s what the current fee structure officially on  IPTO (Insolvency & Public Trustee’s Office) .

From 1 June 2012 onwards, money lenders are only permitted to charge six types of fees:

  • For each occasion of late repayment of principal or interest;
  • For each occasion the terms of the loan contract are varied at your request;
  • For each dishonoured cheque issued by you;
  • For each unsuccessful GIRO deduction from a bank account, as payment to the moneylender;
  • For early redemption of the loan or early termination of the contract; and
  • Legal costs incurred in the recovery of the loan.

Any other fees are not permitted, and are hence not enforceable by the money lender.  An official guide can be found from IPTO for further review

Why the need for change?

Primarily, the number of complaints against moneylenders have been on the rise. Recent news of money lenders in heartlands (Toa Payoh and Ang Mo Kio) have triggered a spate of concerns on easy credit. As compared to the past where they usually operate from areas such as Chinatown and Beach Road. Recent cases of errant money lenders have been sprouting out. Some examples are those who have been furnishing false information  or those granting limits above the standards.

The future in Budget 2014 Singapore?

In short, moneylenders will be having tighter rules on lending policies. Fee charges review. And a new bankruptcy policy. And how does it affect you as a borrower?

For the uninformed borrowers, it becomes tougher for bad money lenders to accumulate charges on the borrower. A better way to borrow money from licensed moneylenders. With this in mind, you will make a better choice in choosing your next payday loan or foreigner loans.

How Budget 2014 Singapore affects moneylenders?

Budget 2014 Singapore affects money lenders in several ways. The new schemes allow better ways to establish moneylending.  It allows money lenders to establish a better understanding of the situation and a better relationship with the borrowers as they can better control their limits. Borrowers will benefit from a better fee structure. Are you affected in this year’s Budget 2014 Singapore? Share with us on how it has affected you . 

How Budget 2014 Singapore affects borrowers?

With the new schemes it will allow borrowers to be more educated and informed. Borrowers can benefit from the new fee structure and limit caps. This prevents themselves from underestimating their loan amounts and repayment policies.

What is going to happen to Empire Global?

At Empire Global you as the borrower, are our customers. We offer better flexibility in terms of overall policies and fees. We have long anticipated this move by the government. The rampant growth of moneylenders in Singapore has led to increasing numbers of unethical moneylenders gaining from the stress of borrowers.

We at Empire Global want to prevent that. We have continually improved our service quality to differentiate out from the rest (illegal money lenders, unethical licensed moneylenders) and constantly learn from our borrowers to better service them.