This article is from a contributor who prefer to remain anonymous. He puts forward the view that the cap on interest rate imposed for loans given to low income borrowers will actually work to their disadvantage as the licensed money lenders will find it not viable. The low income borrowers will have to turn to illegal loan sharks.
http://tankinlian.com/admin/file.aspx?id=633
http://tankinlian.com/admin/file.aspx?id=633
3 comments:
An expanded version of the same article...
http://www.scribd.com/doc/84927075/Singapore-Moneylender-Regulations
The moneylending business is a typical "laughing cookie".
First the Govt deregulated the business,allowing lenders to set their own interest, then greed reins and interest rate shoots up to levels like the illegal Ah Loongs.
Then they found out the lower classes borrow to gamble at the 2 casinos. Alarm bells are sounding, so back to screwing up the nut on regulation, first by banning advertisments, so moneylenders can only publicize themselves on their shop fronts. Now more tightening regulations are enforced, and moneylenders are now crying daddy and mummy, as they now find they can't do business at all.
These civil servants, being brought up in a comfortable greenhouse, are not street smart, entirely oblivious to the real life situation on the ground, setting rules without market survey, like children playing masak masak.
Like the shape of the round cookie, moneylenders are brought back to ground zero again, after a big merry go round.
And as usual, civil servants are prevented to take responsibility for this amusing episode, to avoid the Minister in charge of the Ministry from being embarrassed for the mistakes made.
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