SINGAPORE- Singapore needs a centralised database which can track how much a person has borrowed in total across moneylenders, said Law Minister K. Shanmugam.
This will help the Government when crafting regulations for the sector, which has come under scrutiny. Information on moneylender loans is now not consolidated, and records are often just based on what borrowers choose to reveal about their loan history.
This has to change, said Mr Shanmugam.
"We need a system where we have a centralised place where we know exactly who has borrowed how much," he said yesterday on the sidelines of a community event in Chong Pang.
"Consolidation of data is one of the things we're going to try and achieve", and it is only with centralised records that the ministry can better evaluate how overall borrowing in moneylending can be regulated, he explained.
Speaking to The Straits Times yesterday, Mr Shanmugam gave details of his ministry's proposed cap on overall borrowing, which would align the sector's regulations with those of banks.
Last September, new bank borrowing limits were announced - starting from June next year, people whose unsecured debts are more than 12 months of their income for 90 days will be barred from getting more credit.
Worries about easy loans were sparked following recent reports on the number of licensed moneylenders setting up shop in the heartland.
Following further reports last week in The Straits Times about a possible government cap on how much a person can borrow from moneylenders, the industry raised concerns about where the limit would be drawn.
Some moneylenders said that too tight a limit could push people to loan sharks.
Mr Shanmugam said that "no position has been taken" yet on where that line resides, but the ministry is "doing a study" and "trying to judge" where best to draw the limit.
"We will take into account the industry's views, not just moneylenders but others as well, such as Credit Counselling Singapore, and we will also look at the way the Monetary Authority of Singapore is coming up with regulations on financial institutions," said Mr Shanmugam.
He added that more details on the cap would be available "in due course" as the study would "take some time".
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