Imposing Limits to Credit Facilities and Charges by Platform Operators to Platform Workers Under Financing Programme
Ministry of LawSpeakers
Summary
This question concerns Mr Chua Kheng Wee Louis’s inquiry regarding whether the Government will cap fees and credit facilities for platform worker financing programs. Minister for Law Edwin Tong Chun Fai explained that operators may lend as exempt moneylenders under the Moneylenders Act if they provide sufficient safeguards. Currently, GFin Services is the only permitted entity and is subject to fee and debt service ratio restrictions more stringent than those for licensed moneylenders. The Government imposes legislated limits on loan quantums and requires GFin to implement internal credit scoring to assess a worker’s maximum borrowing capacity. Additionally, the operator must provide support initiatives for workers facing repayment challenges to ensure that credit remains safe and regulated under the exemption framework.
Transcript
38 Mr Chua Kheng Wee Louis asked the Minister for Law whether the Government is considering imposing a limit to credit facilities and capping the fees and effective interest rates charged by platform operators to platform workers under their financing programme.
Mr Edwin Tong Chun Fai: Under the current framework for the regulation of moneylenders in Singapore, a platform operator may lend money to its platform workers as an exempt moneylender under the Moneylenders Act. In order to be granted an exemption, the proposed lending must be assessed to have potential benefits to borrowers, such as providing an avenue of safe credit to meet a specific need, while also having sufficient safeguards in place to protect borrowers.
GFin Services (GFin), a subsidiary of Grab, is the only platform operator currently permitted to lend money specifically to Grab's platform workers under this exemption framework. The Government imposes on GFin various restrictions on lending, as conditions of the exemption, including limits on permitted fees and debt service ratios, which are generally more stringent than those applying to licensed moneylenders. There are also legislated limits on credit facilities, in particular caps on the loan quantum, for exempt moneylenders. Beyond these, GFin must additionally implement safeguards, such as an internal credit scoring system to assess the maximum loan a platform worker can take and various support initiatives for platform workers facing challenges in making repayments.