ST : Estate agents dropping moneylending role a good move: SAEA

May 22, 2010

Estate agents dropping moneylending role a good move: SAEA

WITH reference to Thursday's report ('Grouses spark crackdown on moneylenders'), the Singapore Accredited Estate Agencies (SAEA) is heartened to learn that licensed moneylenders who are concurrently running property businesses have indicated their intention to give up the former and concentrate on their estate agency work.

SAEA has always held that the two businesses should not mix and does not agree with the view that the credit business is a natural corollary of estate agency work as conflict of interest will arise in acting for a client in a property transaction and extending a loan to the same.

It is also felt by some cited in the report that 'people will turn to loan sharks again' if licensed moneylenders cannot lodge caveats on HDB flats as a collateral for lending and even the small number of property agencies and/or agents who are in the credit business are shipping out of it. The concerns may be unfounded.

The police have relentlessly pressed on with its ground efforts against loan sharks. Arrest figures reported remain high - 958 arrests last year which is a 90 per cent increase from the year before. Arrests apparently reached a high of 132 in January this year, compared to a monthly arrest rate of 80 last year. That shows that law enforcement agencies are focusing on this problem, apprehending runners as well as targeting syndicates.

On Jan 12, Parliament passed the Bill to strengthen the Moneylenders Act, including mandatory caning for first-time offenders who carry out or instigate harassment activities, and freezing the assets of loan sharks. While the proposal to criminalise those who borrow from loan sharks has been put on hold for now, borrowers who provide loan sharks with a false or outdated address may be jailed for up to a year. With the slew of measures in place in the amended Moneylenders Act, the fear that people will turn to loan sharks again is more imagined than real.

Estate agents who are aware of their clients' dire financial plight should advise them to seek appropriate avenues in addressing their debt situation, such as Credit Counselling Singapore, and not encourage them to sell their HDB flats as a first resort.

Dr Tan Tee Khoon
Chief Executive Officer
Singapore Accredited Estate Agencies