Two borrowers describe their ordeal

SINGAPORE - A company he started in India failed and Mr Bhai (not his real name), 40, found himself $120,000 in debt with four banks.

He initially joined a debt management programme with Credit Counselling Singapore, which helps those with financial problems, paying his dues for three months.

But in June last year, the IT officer decided to borrow money from a licensed moneylender. Part of it was to pay off the banks and the rest for personal use.

He couldn't manage the expenses, he said. By the end of the year, he was owing about $20,000 to 15 licensed moneylenders.

As he could not repay some of these loans on time, they sent debt collectors to his home and workplace. They even sent letters of demand to his employers, landing him in trouble with them.

Mr Bhai said debt collectors have visited his house about 100 times since December, at odd times of the night and in the wee hours.

"Once, they came when I wasn't at home. My wife doesn't understand English and they made her cry. She's cried many times over this," said the Singapore permanent resident.

The licensed moneylenders have also e-mailed and faxed letters of demand to his workplace.

"My human resources (HR) officer shouted at me, my manager shouted at me. Where I work, if anyone has financial difficulties, their employment gets terminated," said Mr Bhai tersely, adding he has been warned twice. The next time, he will be axed.

Another debtor, a manager who wanted to be known as Mr Lim, 40, said he had been $30,000 to $40,000 deep in debt with the banks - a combination of loans and credit card problems - in late 2010, when he turned to licensed moneylenders.

"I thought at first that with three moneylenders, I could settle my debts. But they snowballed," said Mr Lim, who has two children in their 20s and earns about $3,000 a month.

"For moneylenders, when you borrow $1,000 you have to pay $2,000 in total. For 'Ah Longs' (unlicensed moneylenders), when you borrow $1,000 you pay only $200 extra."

But he said he had not considered the latter (the Ah Longs) as an option as he felt they were unsafe - "you don't see them, they don't see you". He admitted that as he was being "chased" by the banks, he decided to try his luck with horse racing, 4-D and Toto.

"I was hoping God might help me, I just tried my luck. But I didn't win."

At his worst, he owed between $7,000 and $9,000 to eight or nine moneylenders.

"Once they come to your house, they will keep shouting and asking for payment.

I told them to stop, but they just told me if I couldn't pay the next time around, 'you watch out'. They will come again."

He said debt collectors marched to his 100-strong office with a printout of his face, but he wasn't around.

"At that point, I already knew they were going to come to the office (as they had threatened). So I took leave to 'siam' (Hokkien for avoid) first. My boss was sympathetic, he just told me to try and settle my debts."

Mr Lim added he regretted that, for about half a year, he hid his money woes from his wife and children.

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