N* came to Singapore like so many other FDWs, to support her family back home. She is educated, bright and a simple person who wants to send money every month to her children for them to have a better life.
Often on Sundays, she had noticed the queues of helpers in front of moneylending offices, and like many others she was well aware of all the risks. She knew that she should keep away from loansharks at all costs… But one day, like many others had before her, N* fell into a drastic spiral…
N* actually had a family debt from back home when she arrived here. A few months into her employment as a FDW, her relative claimed his money back, and she was unable to repay. She took a loan from a neighbour in her own country with a 10% interest and paid back her relative. But soon she became pressured by the neighbour to repay the loan and interest. So N* took three new loans in Singapore: S$600 and S$1000 from a local moneylender and S$1000 from on online moneylender. All amounts were sent back home to settle the neighbour loan.
The relative was happy, the neighbour was happy.
However N* was now left with an important debt to be settled in Singapore. On the first month, her minimum repayment was S$350 + S$350 + S$100. With a monthly salary of S$614, N* realised she was short of money.
This is when she came across a fellow FDW from her own country, they discussed about her problems, and the domestic worker, supposedly as a friend, gave N* the number of a lender. The FDW was from the same region, she seemed trustworthy enough, so N* contacted the lender. N* found out later that the alleged friend would receive a commission for passing on the contact details of the lender. She was acting as an “agent” with all the other FDWs she knew were in financial difficulties.
N* enquired about a short-term loan of S$200 but changed her mind. When she advised the lender that she was not going ahead, he became verbally aggressive and intimidating. He pretended that it was too late, that the money was already transferred. He later sent her the receipt of the transfer as proof and N* realised that the transfer had been done AFTER she had told him that she wanted to cancel the transaction. He had lied about the transfer being already made and cornered her to accept the loan, although she had clearly expressed her decision not to go ahead. N* confronted him and he only replied “You need to pay back S$200 within five days, we start counting on Wednesday. No need to pay more, we can defer”.
N* was aware that “defer” meant hidden costs. The interest was already S$100 after five days so to avoid further fees, she borrowed a S$300 from a licenced moneylender. On the following Monday, she was able to repay S$300 to the lender but he became infuriated that she had paid all due amounts. Fours days later he sent a new message claiming that she had paid late and therefore would need to pay an extra S$200 as late payment charges. N* refused, she told him that her monthly salary was just S$600 but the lender showed no compassion or guilt and just bragged that he had been lending money for five years and had never been caught by the police. This is when the threats started: he threatened to burn the employers’ house down, he sent a video of a house on fire, he also threatened to display N* picture all around the neighbourhood.
At that point N* thought the best option was to speak to her employer. They were surprised, shocked, but rather understanding to N*. They called the lender, felt intimidated when the man started shouting insults and threats, and agreed to transfer S$200 the same day. They did not call the police. N* was told that the amount would be deducted from her next salary. Although her employer acted very kindly to N*, eventually they felt that it was better for her to go home. They did not get angry with N* but they cancelled her Work Permit and she left the following day. She is now looking for a new employer, possibly in Hong Kong or Japan.
Today, N* has learnt her lesson and she wants to share her story with other domestic workers to warn them of the risks. She has huge debts, she has lost her job and she has lost the trust of a very good employer. N* is not the only one though. Many other FDWs are subject to similar issues. A friend of N* actually supplied photos of her employer’s family: as she could not repay, the loanshark subsequently threatened to kidnap the employer’s child. Everywhere in Singapore, loansharks carry on trading and a handful of helpers act as go-between to promote the illegal moneylending business. They themselves may have debts that they need to settle but they bring others down with them. And this is a risk that all FDWs need to be aware of. Just because a domestic worker is from the same country, it does not make that person necessarily trustworthy. And she is not automatically a “friend”.
There is a huge amount of shame around these issues and quite often FDWs will refuse to seek help or speak openly. A few will lose their job and be sent home, and no one really knows what has happened. Neither the workers nor the employers may agree to report the loansharks to the police. In the meantime, the number of victims seems to grow. There needs to be better awareness. FDWs need to learn more about budgeting, about financial planning. Discussing financial plans with employers can help. Victims need to speak more openly of these issues, to warn others, because anyone can fall into the spiral. And once you step into the spiral, it is near impossible to recover unharmed.