Like their counterparts elsewhere in the world, money lenders in Singapore are individuals or group of individuals who lend mostly small or medium scale personal loans to individuals at very high interest rates. These money lenders are neither banks nor financial institutions and their loans are mostly without adequate collateral and in some cases do not have any covering collateral. It is for this reason that such loans are referred to a unprotected loans.
Government Restrictions on Money Lenders
Money lending is big business in Singapore but unlike in some other countries, money lenders in Singapore are not allowed to advertise their money lending outfits. This regulation against advertisement for those involved in the business of giving out unprotected loans to individuals, with very high interest margin, cuts across all spectrum of marketing including online marketing.
In the last one year though, money lender Singapore businessmen have tried to look for ways to circumvent this restriction using the internet as their preferred choice of channel though it has not been easy because the Singaporean authorities usually come down very hard on any person or group of persons found to be in breach of the ban.
Money Lenders still the Option of Choice for the Poor
One observable trend is that even with these restrictions set by the government to limit the number of Singaporeans that have access to these loan sharks, a growing number of people still resort to the services of these money lenders who most times happen to be fronts for underworld kingpins who uses it as a means of laundering their money locally. The reason why most people, particularly the poor and the lower middle class, flock to these money lenders is because it is easier to obtain a loan from these loan sharks than from the banks and other financial institutions.
Conclusion
As can be seen in the article, money lenders provide a service or bridge a gap in a service: they give easy loans to those who can’t access loans from the banks or fulfill the conditions necessary for getting a loan from a regular financial institution. If the government really wants to make money lenders unattractive in Singapore, they should focus more on passing legislation that will make access to bank loans easier for the populace. Taking this approach will prove more effective than advert bans because people will prefer to deal with credible financial institutions than these loan sharks who are in most times unscrupulous people.
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