Home News Domestic helpers need not get employers’ permission before taking out loans: MOM

Domestic helpers need not get employers’ permission before taking out loans: MOM

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Ministry of Manpower (MOM) Senior Parliamentary Secretary Low Yen Ling has expressed that there are no plans to require foreign domestic workers to get permission from their employers before taking out loans for legal moneylenders, since this may just cause more problems in the long run.

Answering a question from Ang Mo Kio GRC MP Darryl David on Monday, November 19, Low said, “We are concerned that if and when we do so, it may well trigger the FDWs towards taking more drastic actions, such as… borrowing from the unlicensed moneylenders to avoid telling their employers.”

David had suggested that a ruling mandating employers’ consent be made, and also asked if the names helpers who had borrowed money from unlicensed lenders and sent back to their own countries can either be forbidden from entering the country or at least put on a watchlist.

Low said that in 2019, after an education program for helpers, employers and other parties involved would be carried out, such debarment measures would begin. MOM, Low assured the House, has stepped up its efforts in educating new helpers in managing their money and the perils and consequences of borrowing too much money as well as doing so from illegal lenders.

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Edwin Tong, the Senior Minister of State for Law and Health, had earlier cited how the number of helpers who have borrowed from licensed moneylenders has increased much in the past few years. In 2015 1,500 helpers borrowed money, in 2017 it was 12,000 and from January to June of this year, 28,000 helpers had borrowed money from licensed moneylenders.

Read related: MOM: Employers no longer allowed to hold money for domestic helpers

Tong also said that police have reported that more foreigners, including helpers, have borrowed money from unlicensed lenders. But the Law Ministry has recently meted out two protective measures to prevent foreigners from over-borrowing and its resultant negative effects, such as putting caps on the loans they can borrow and permitting foreigners to apply for self-exclusion from using the services of licensed moneylenders.

When Louis Ng, the MP from Nee Soon GRC asked if MOM knew why helpers often borrowed money, Low said that she had heard anecdotally that helpers take out loans to pay for the needs for their families, including tuition and doctors’ fees, and that they are thinking of conducting a study to better understand the needs for loans.

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