Methodists in Singapore are marking two jubilees next year by helping poor families get out of the debt trap.
Methodist Welfare Services (MWS), the charity arm of the Methodist Church, is raising $1.7 million to help 850 families in its care clear their debts next year.
It estimates that these families owe an average of between $2,000 and $3,000 as they cannot make ends meet and are often in arrears for utilities, phone and rental bills and mortgage payments.
It will hand out an average of $2,000 to each family as a one-time gift to help them make a fresh start, MWS executive director Jenny Bong told The Sunday Times.
"If you can't clear your debts, there's no way to get out of the poverty trap and you just sink deeper and deeper into debt," she said.
The project will mark both the 130th anniversary of the Methodist Church in Singapore and the country's 50th jubilee next year.
Mrs Bong said many poor people in debt end up borrowing from extended family members, often leading to strained relations. In emergencies, some turn to legal money lenders and loan sharks.
MWS will not cover gambling or credit card debt. It will help clear only debts related to daily necessities, such as utilities and rental arrears.
Debt is a common problem for the poor. The bottom 20 per cent of households earn an average of $2,022 but spend an average of $2,231, going by the latest Household Expenditure survey by the Statistics Department.
MWS aims to raise the $1.7 million it needs, and will turn mainly to members of the 46 Methodist churches here.
Another group helping the poor similarly is the charity Care Corner, which is raising $1 million to give $2,000 each to 500 families in debt.
Earlier this year, MWS started a pilot programme in which it matched every dollar of debt paid off by its clients, up to $100 a month.
Some 70 families, many with a monthly household income of less than $1,500, are on the scheme.
Most do not have even $100 in savings, said Ms Cindy Ng, assistant director of Covenant Family Service Centre, which is part of MWS. "Many ignore their debts as they can't deal with it. They are crippled by the anxiety of living hand to mouth," she added.
With financial support and counselling, most have made a start, paying off as little as $10 a month instead of watching their debts grow.
And down the road, MWS plans to start a savings scheme, by matching each dollar saved, to encourage these families to build up some savings.
Part-time cleaner Kong Siow Lin, 48, is grateful for the MWS scheme.
The divorced mother of two sons earns $700 a month. She owes Singapore Power $900 in arrears and has paid $720, half of it with help from MWS' debt matching scheme.
She also owes the Housing Board about $400 for her rental flat and owes her siblings a few thousand dollars.
She said: "Everything is so expensive in Singapore and it's very hard to survive. With help from MWS, at least I don't feel so worried all the time."
This article was first published on December 7, 2014.
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