Data Collection and Categorisation of Causes of Individual Bankruptcies in Last 10 Years
Ministry of LawSpeakers
Summary
This question concerns the causes of individual bankruptcies over the past 10 years and the methodology for data collection and categorisation. Mr Saktiandi Supaat inquired about the top five bankruptcy causes and how the government promotes entrepreneurial risk-taking without encouraging financial irresponsibility. Minister for Law Edwin Tong Chun Fai identified business failure, consumer overspending, unemployment, guarantee liabilities, and low income as the primary causes based on self-declared Statement of Affairs data. To foster responsible entrepreneurship, the government provides support through grants requiring dollar-for-dollar matching, mentorships, and talent programmes to ensure founders have a stake in their outcomes. Minister for Law Edwin Tong Chun Fai added that the bankruptcy regime is regularly reviewed to balance business activity interests with individual financial responsibility.
Transcript
40 Mr Saktiandi Supaat asked the Minister for Law (a) what are the top five causes of individual bankruptcies in the past 10 years, including business failure; (b) how is such data collected and categorised; (c) if such data is not available, would the Ministry consider collecting them; and (d) how do we maintain a healthy risk-taking entrepreneurial culture while not indulging those who are financially reckless or irresponsible.
Mr Edwin Tong Chun Fai: The top five causes of bankruptcy in the past 10 years were business failure, overspending on consumer goods and services, loss of income due to unemployment or retrenchment, liability due to guarantees and low income. This information is self-declared by debtors in their Statement of Affairs (SA), either in their bankruptcy application or upon their being made bankrupt on a creditor's application. When filling up the SA, the debtor selects the most applicable cause of insolvency from a drop-down list.
To foster a vibrant, innovation-led environment for entrepreneurs to thrive, the Government has introduced a comprehensive range of schemes and programmes to support our local startups and encourage innovation. These include mentorships from Accredited Mentor Partners, grants to entrepreneurs, talent support and providing startups with spaces to meet the needs of promising founders and startup enablers and help them grow. To encourage healthy and responsible entrepreneurship, it is important that our entrepreneurs make sound financing decisions and have a stake in the outcome. For example, the Startup SG Founder grant requires a dollar-for-dollar matching by entrepreneurs.
The Ministry of Law also regularly reviews the bankruptcy regime, which strikes a balance between the interests of persons seeking to engage in business activity and financial responsibility.