COVID-19 has hit the world like a hurricane and Singapore is currently in the midst of dealing with this once-in-a-century pandemic.
As of 2 May 2020, there are 17,548 cases of COVID-19 in Singapore with 17 fatalities. Most of the patients are work permit holders from foreign worker dormitories.
The Singapore government has implemented the Circuit Breaker, which requires Singaporeans and foreigners to stay at home, work from home and to avoid going outdoors unless for necessary purposes. Unless their job is classified as an Essential Service, most of us will be staying home.
Economic Impact Of COVID-19: Likely 150,000 To 200,000 Retrenchments
Times are tough.
COVID-19 brought huge economic impacts. Businesses and families are facing financial difficulties amongst this difficult period. Jobs are lost and salaries are cut. Economists even estimate a loss of 150,000 to 200,000 jobs.
Stock prices are falling and even oil prices turned negative for the first time in history. WTI (West Texas Intermediate) and Brent Crude have both dropped.
Many Singaporeans are facing financial issues as well. Some are struggling to pay bills, make necessary purchases, pay their credit card debts or simply to make ends meet. The situation is worse for those who have lost their jobs or a portion of their income to COVID-19.
Licensed Moneylenders Considered Essential Services Allowed To Continue With Limited Operations
During the Circuit Breaker period, only essential services are allowed to operate. Based on gobusiness, banking and finance “services relating to maintenance of monetary and financial stability” are allowed to operate.
Other than banks, licensed moneylenders like Credit 21 fall into the category of essential services. We are allowed to operate.
However, licensed moneylenders are only allowed to proceed with limited operations. They have to be closed on certain days and abide strict social distancing rules. Credit 21 will only open on Tuesdays, Thursdays and Saturdays from 1pm to 5pm. This might mean longer queues and waiting hours.
Based on a news article by Mothership, there are people queuing up to borrow money from licensed moneylenders. Other than banks, licensed moneylenders in Singapore provide another source of financial support during difficult times. Quick cash loans and urgent loans are available.
Interest rates from licensed moneylenders will be slightly higher as they offer unsecured loans (non-collateral loans) which come with higher risk. However, most moneylenders are willing to negotiate to find a suitable loan package for borrowers especially during tough times like these.
How Can I Tell If A Moneylender Is Licensed And Avoid Loan Scams
Even during desperate times, one should never borrow from loan sharks and unlicensed moneylenders.
Also, we should be careful not to fall for loan scams as scammers prey on those affected by COVID-19. Scammers have stolen at least $110,000 from innocent victims.
Licensed moneylenders are not allowed to:
- Ask for your SingPass ID/password.
- Retain your NRIC or other personal identification documents.
- Not allowed to approve your loan over the phone or transfer money into your bank account. You need to visit their shop physically.
- Withhold any part of your principal loan amount for any reason.
- Use abusive language towards you.
- Ask borrowers to sign a blank contract form.
All licensed moneylenders approved by the Ministry of Law will need to have a physical shop and a landline. Those without are usually illegal lenders.
Licensed moneylenders are also not allowed to advertise via SMSes, emails or flyers. If you receive those, they are illegal and likely from loan sharks. As stated by the Ministry of Law, licensed moneylenders are only allowed to advertise through business or consumer directories, their own websites and within their own shops.
Loan scams are also increasingly common in Singapore as scammers prey on the desperation of borrowers. The most common scam tactic is where they ask victims to transfer over a sum of money for a larger loan.
Licensed moneylenders will never ask borrowers to transfer money over for loan approval. You do not need to pay in order to get your loan amount.
Financial Support From Singapore Government During COVID-19 Outbreak
The Singapore government is prepared for this pandemic. Since the beginning, they have been providing grants and financial schemes to help Singaporeans.
Before you apply for a loan with a licensed moneylender, do check if you are eligible for any of the government’s support schemes. You can find all financial support links here. All of the packages can be conveniently applied online.
COVID-19 Support Grant (Application Opens 4 May 2020)
This assistance scheme provides a monthly cash grant of up to $800, for three months. This grant is for Singaporeans and permanent residents who are currently: 1) unemployed due to retrenchment or, 2) currently taking no-pay leave for three consecutive months or, 3) had at least a 30% salary reduction as a result of COVID-19. You can apply here.
While we patiently wait for our favourite bubble tea stores to reopen, do your part by staying home. Be socially responsible. As long as Singaporeans stand together, we can overcome.
However, if you are in a financial pinch or need urgent help, Credit 21 is here to help you tide through. Send us an application and see what we can do for you today.