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Source:
www.mas.gov.sg |
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Question No. 45 and 46 Notice Paper No. 150 of 2005
For Written Reply |
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Name and Constituency of Member of
Parliament Q45 and Q46 - Assoc Prof Ong Soh Khim |
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Question |
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Q45: To
ask the Senior Minister |
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(a) what is Singapore's ratio of consumer
debt and household debt as compared to countries such as United Kingdom,
United States, Hong Kong and Japan; |
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(b) what is the percentage of Singaporeans
who are repaying at least one form of debt; |
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(c) what is the percentage of Singaporeans
in credit card debt; (d) what is the percentage of Singaporeans in
housing loan debt; (e) what are the preemptive educational programmes to
reduce the debt of Singaporeans; and (f) what are the help measures and
repayment schemes available to Singaporean debtors to reduce bankruptcy
due to these debts. |
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(d) what is the percentage of Singaporeans
in housing loan debt; |
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(e) what are the preemptive educational
programmes to reduce the debt of Singaporeans; and |
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(f) what are the help measures and repayment
schemes available to Singaporean debtors to reduce bankruptcy due to
these debts. |
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Q46: To
ask the Senior Minister for the first six months of 2005, |
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(a) what is the number of bankruptcy cases
due to credit card debts; |
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(b) what is the percentage of these
credit-card linked bankruptcy cases in relation to the total number of
bankruptcy cases; and |
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(c) what are the profiles of these credit
card debtors with respect to age, gender and educational level. |
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Mr Tharman Shanmugaratnam, Minister for
Education and Deputy Chairman: |
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MAS' estimates show that Singaporean
households' liabilities were about 85% in 2004, down from 96% of GDP
in 2003. |
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This ratio was lower than that in the UK and
broadly similar to the US, but higher than in Hong Kong and Japan.
[Household liabilities in the UK, US, Hong Kong and Japan are estimated
at 91%, 83%, 60% and 64% of GDP respectively in 2004]. |
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However, it is not possible to look at
household debt without looking at household assets. The higher level of
household liabilities in Singapore generally reflects a higher level of
household assets as well. |
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In fact, taking both assets and liabilities
into account, Singapore households as a whole have an estimated positive
net asset equivalent to about 3.7 times of GDP. This is comparable to
most OECD countries. Basically, high household assets reflect our higher
home ownership rates compared to other countries. |
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The credit card charge-off rate, defined as
bad debt written off as a proportion of average rollover balance, was
5.8% on average in 2003 and 2004 in Singapore. |
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This was comparable to that in the US and
lower than that in Hong Kong and Korea. [Charge off rates for US, Hong
Kong and Korea during the period were 5.1%, 7.7% and 13.4%
respectively]. |
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In the first 6 months of 2005, there were
1,759 bankruptcies. Of that number, 1,207 were consumers and the rest,
businesses. 723 consumer bankruptcies were due to credit card debts, or
60% of all consumer bankruptcies. |
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To put this in perspective, the number of
credit card bankruptcies as a percentage of credit card users is
extremely small, less than 0.05%. The majority of credit card
bankruptcies were in the 31-50 years age group. 79% were male and 21%
female. We do not collect data on their education levels. |
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In Singapore, credit cards are generally
used as a mode of payment, with only 17% of credit card debt rolled over
for more than one month as at Q2 2005. The utilisation rate of credit
cards has also fallen from a high of 24% of credit limit to 18% in Q2
this year. |
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The most effective solution to managing
consumer debt levels is for individuals and households to learn how to
manage their finances. They have to consider if they can afford to
service and pay off a loan before taking it up, and understand how
getting into too much debt can affect their long term financial
well-being. |
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Though MoneySENSE, the national financial
education programme, we are seeking to help Singaporeans acquire the
skills and knowledge to better manage their day-to-day finances, make
prudent investments and plan for their longer-term needs. MoneySENSE has
been working with industry associations to publish consumer guides and
newspaper articles, as well as to organize events, to disseminate
messages on prudent debt management. |
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There are specific programmes for specific
segments. For example, MoneySENSE is working with the Community
Development Councils (CDCs) to run on-going basic money management
workshops for low-income families. |
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In addition to basic savings and budgeting
skills, the workshops provide tips on prudent debt management. Ministry
of Education (MOE) is infusing financial literacy concepts into the
school curriculum. MoneySENSE is also working with private educational
specialists to organize workshops and develop creative and fun
activities to promote the teaching of financial literacy in schools. |
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To advise and assist borrowers on debts
already incurred, Credit Counselling Singapore (CCS), a non-profit
organization, was launched on 14 October 2004. CCS helps consumers
recover from serious debt problems by providing general credit
management information, credit counselling and where applicable, helping
them to work out a debt repayment plan. |
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While there are credit counseling schemes in
place and we are stepping up our financial education programmes, the key
remains for consumers to take personal responsibility for managing their
finances and planning for the long term. |
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Source:
www.mas.gov.sg News Release 17 Oct
2005 |
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FrontPage Edition: Mon 24 Oct 2005
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