MONEYLENDERS (AMENDMENT) BILL

MONEYLENDERS (AMENDMENT) BILL: Order for Second Reading read.

3.19 pm

The Senior Minister of State for Home Affairs (Assoc. Prof. Ho Peng Kee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, last year in August, I informed this House that MHA was studying how to tackle this loanshark scourge more effectively. Setting out the various measures already in place, I said that we would tighten our laws to plug the gaps. Sir, this Bill is a result of our review. A key focus is to introduce powers that would disrupt the finances that sustain loanshark operations, hitting, in particular, loansharks in the higher echelons of the syndicates, where it matters most. It also introduces new measures to strengthen the existing legal regime. These include enhancing existing penalties and, specifically, criminalising acts that contribute to or advance loanshark activities in Singapore. And our laws' reach will also be extended beyond our borders.

But, Sir, let me first set the problem in its proper context which is that the loanshark scourge is not unique in

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Singapore. Indeed, it is a problem other countries face as well. In fact, loansharking is entrenched in countries such as Malaysia, Hong Kong and the UK, where the authorities, like us in Singapore, face stiff challenges in trying to eradicate it. How loanshark syndicates have evolved in other jurisdictions, including the use of violence, the cross-participation with other organised criminal activities like drug-trafficking, has convinced us that we must take tough actions to deal with this scourge before it grows to become a greater threat to our citizens’ safety.

Loansharking and related harassment reports continue to rise

Measures proposed in this Bill will considerably strengthen the matrix of measures that MHA has progressively introduced since 2005. These include increasing penalties and cancelling passports. We also invoked the Criminal Law (Temporary Provisions) Act to detain loansharks against whom witnesses were afraid to come forward to openly testify. Despite these measures, loanshark activities persist. Except for a brief respite in the year 2007, when the number of loanshark and harassment cases dropped slightly, the number of reports has continued to rise, with 11,879 cases reported in 2008 and 18,645 cases reported last year.

On its part, Police’s response has been emphatic and clear. The Criminal Investigation Department consolidated loansharking investigations island-wide under an Anti-Unlicensed Moneylending Taskforce in 2005 and reconstituted itself in 2008 into Specialised Crime Investigation Branches. Today, the CID works with designated teams in the Police land divisions to mount ground operations, whilst also conducting intelligence-led operations on its own. More CCTVs have been installed. Following my call last

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August in this House for strong community action, the community responded very positively by forming Citizens-on-Patrol Teams and Neighourhood Watch Groups. And I know the grassroots advisers and Members here have also taken the lead in leading the communities. Civic-minded individuals including alert taxi drivers, ATM users and, indeed, newspapers deliverymen have all chipped in. The efforts of these grassroots leaders, watchful neighbours and active citizens have led to the arrests of a number of runners and harassers. The Straits Times reported in August last year that more than 180 Neighbourhood Watch Groups have been operating as Police’s "eyes and ears" on the ground.

This Community-Police collaboration has borne fruits. So, with the ground and Police working in tandem, even though the overall number of loanshark cases, year for year, has gone up, the number of loanshark and harassment cases on a quarter-to-quarter basis actually fell from 5,287 cases for the period April to June last year to 4,377 and 4,845 cases for the last two quarters respectively. The number of arrests have risen from 390 in 2007 to 505 in 2008 to 958 last year. So, this also means that we mean business and the Police working with the community are apprehending more loansharks and the runners. Indeed, the Police took down 13 syndicates last year, compared to the nine the year before. And these syndicates that were taken down were believed to be responsible for at least 3,800 harassment reports.

Now, why are there more harassment reports? A key reason is that loansharks now increasingly target innocent neighbouring households by splashing paint on their doors, or on their cars in multi-storey carparks, hoping that peer pressure would force the borrowers to pay up. Indeed, in some instances, knowing that innocent parties are frustrated, loansharks demand

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that they pay up on behalf of the actual debtors! These acts, though generally non-confrontational in nature and non-life threatening, nevertheless disrupt the community’s sense of safety and well-being. Having said this, the Police is closely monitoring the dangerous tactics employed by some loansharks, not all, of locking people up in their homes or setting on fire items found outside their homes. If caught, these harassers will be punished with the full brunt of the law.

Also, our HDB estates are open and compact. They are particularly susceptible to the indiscriminate harassment gangsterism shown by loanshark syndicates. The large majority of harassment cases occur in our HDB heartlands where home-owners live in close proximity. Sometimes, even those living a level above or below the actual borrower’s unit are hit. Although less than 1% of HDB households are harassed, every innocent household harassed is one too many.

Loansharks are organised criminal groups

In August, I said that we needed to shift our paradigm as to how we view loanshark syndicates, that is, from unscrupulous moneylenders charging exorbitant interest rates to being a pernicious form of organised crime. Criminal acts perpetrated by organised criminal groups are a threat to society as they are tougher to eradicate and can create greater community impact.

Let me share some insights into how loanshark syndicates operate in Singapore. Today, technology gives us access to a global network of information and services. People are easily hooked up via social networking sites such as Facebook and Twitter. Whilst connectivity through IT has many positive features, the flipside is that it enables criminal elements to perpetrate their crimes under a shroud of anonymity. Advances in communications technology and the ways money can

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be transferred have led to loansharking syndicates and their operations becoming more extensive and sophisticated. Loansharking syndicates now exhibit characteristics of organised criminal groups and thrive on the profitability of the illicit business. These syndicates may either be one-person operations or, what is more likely, operations with multiple layers, typically with a " towkay " or "financier" who provides the capital, " ah longs " who operate the "stalls" which issue loans, typically through electronic banking transactions, and then, runners who commit acts of harassment and conduct other ground operations.

Now, loansharks have taken to outsourcing their "business functions" to debtors or youths, who appear easy targets for recruitment. These operatives carry out functions ranging from assisting the loansharks in the collection of money, to effecting transfers of money electronically, to carrying out acts of harassment. They add to the layers surrounding the loanshark syndicate, shielding the leaders from direct exposure. Members are also fearful to testify against the " ah longs " and " towkays " for fear of reprisal to themselves and their families. And business continuity is high as, characteristically, the syndicates’ structure enables them to elude Police enforcement, replace lower rung members, reorganise their resources and perpetuate their criminal activities.

Loansharks also constantly evolve their modus operandi to elude detection and apprehension. For example, some leaders leverage on technology to direct their syndicates’ operations from overseas, making investigation and arrests even more difficult. With online tools becoming more sophisticated, we are likely to see a corresponding increase in the complexity and repertoire of technological options employed by these criminals. By their nature, loanshark harassment cases are not easy to solve. Unless the perpetrators are caught in the

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act, there are often few leads that the Police can follow-up on. This is especially so in situations involving innocent victims of harassment who have no idea who the loansharks are.

As loanshark syndicates evolve their modus operandi to take on more characteristics of organised criminal groups, it is no longer sufficient to deal with loansharking as discrete acts of runners and harassers. We need measures that can cripple them, that is, disgorge them of their ill-gotten gains, choke the supply of funds and availability of foot soldiers, target the irresponsible borrowers and take loansharks out of the system for as long as we need to. Thus, this Bill allows us to deal with loanshark syndicates as criminal organisations, extend beyond the frontline to target financiers and masterminds, disrupt the flow of money and resources and ensure that syndicate leaders do not escape the bite of our laws by directing local operatives from the haven of other countries. To cripple the many layers of a loanshark syndicate, anyone who contributes to or facilitates a loansharking operation will attract the wrath of the law.

Wider enforcement powers – t argeting the finances

The loanshark scourge persists because loansharks enjoy good profits. They charge exorbitant interest rates and recycle their ill gotten gains to fund more loans, thereby accruing even more profits. It is a vicious cycle. Besides arresting those higher up in the echelon, a key to effectively crippling the syndicates is to disrupt the criminal proceeds and the flow of money and resources that fund their activities.

Framework to freeze proceeds of loansharking activities

Some syndicate leaders are dealt with under the Criminal Law (Temporary

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Provisions) Act (CLTPA). Whilst we can invoke the CLTPA to detain them, we currently do not have the power to deal with their assets in the absence of a court conviction. So cases are dealt with under the CLTPA where witnesses are unwilling to give evidence in open court, either out of fear of reprisal or out of misguided loyalty.

Hence, this Bill introduces a freezing framework specifically for loansharks dealt with under the CLTPA regime. Freezing their assets will hurt them where it matters most and disrupt the criminal proceeds that may otherwise continue to be circulated for loansharking purposes. Under this framework, the Minister is empowered to make an order to freeze a particular property or account held by any person when he has reasonable cause to believe that the property or any funds in the account are proceeds of the loansharking business associated with the detained loanshark. Such a freezing order is applicable to proceeds of loansharking in the form of cash, shares, bank accounts as well as physical assets such as houses and vehicles.

The Minister may vary or revoke the order any time and it is an offence for a person to deal with any property specified under any order unless he does so under the authority of a licence granted by the Minister. Contravening or circumventing the order is an offence. The order will be revoked when the loanshark is no longer detained but will continue if he is put under police supervision upon release. Persons affected by the order can apply to the High Court to set aside the order.

So as not to cause undue hardship to affected families, the framework provides a licensing procedure to enable certain acts to be exempted from the prohibition to deal with the frozen property. For

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example, the licence can permit family members access to the frozen account. Conditions that may be imposed include requiring the person so licensed to account for the use of the funds or specify the amount to be released from the frozen account for use. The licence may be general or granted to a category of persons or to a particular person and the Minister can vary or revoke a licence any time. Failure to comply with any condition in the licence is an offence.

Powers to inspect bank documents and tax information

The Public Prosecutor will be empowered to require the Comptroller of Income Tax to furnish or produce information and documents available to the Comptroller relating to the affairs of a person, including the spouse, son or daughter, during investigations or proceedings against him for loansharking or related harassment activities. The Public Prosecutor will also be empowered to issue an order authorising the Police to inspect documents at a bank or finance company containing information of suspected loansharks as well as their spouses, sons, daughters, trustees and agents. With wider access to these records, investigators will be better able to follow the money trail and glean insights into a syndicate’s network and the identity of its key members. These new powers will help unravel the syndicate network and, in the process, help secure evidence to implicate the financiers who operate behind the scene.

Strengthening the legal regime – criminalising acts that contribute to loansharking activities

Sir, anyone who participates in loansharking operations contributes to the existence and continuity of loansharking activities. Every perpetrator, in supporting the organisation, perpetuates its illegal activities. In essence, when a person

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assists or facilitates a loansharking operation, he becomes part of the many layers shielding the masterminds, allowing them to go undetected. More importantly, when he replaces a person who has been arrested, his doing so enables a loanshark syndicate to reorganise its resources and continue to thrive.

In order to target the many layers forming the organisation, anyone who contributes to or facilitates a loansharking operation, no matter what his role is, will not escape the wrath of the law. This will help us disrupt the syndicates. The Bill therefore amends section 14 (which is on unlicensed moneylending) and section 28 (on harassing borrowers besetting his residence) to treat certain acts as assistance of unlicensed moneylending and abetment of the harassment offence, respectively. These acts include, for example, selling pre-paid SIM cards to loansharks, transporting runners to harassment targets, acting as a lookout for harassment runs and assisting the loansharks in verifying harassment jobs before paying the runners. Indeed, a 27-year old ex-runner said that he was paid $10 for every address that he verified that harassment had been conducted. Sir, these acts are specifically chosen as they reflect the current modus operandi adopted in loanshark harassments. Persons carrying out these acts are deemed to have assisted or abetted loansharking offences and will be liable to the same penalties.

Over the past three to four years, loansharks have been recruiting youths in their nefarious activities. Indeed, their numbers have increased. Last year, 154 youths aged 19 years and below were arrested for loanshark and related harassment activities, compared to 63 youths arrested the year before. Almost half of those arrested were students. In June last year, Police arrested nine loanshark runners, the youngest of whom

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was only 12 years old. The exploitation of youths in the mistaken belief that if caught, they would either get away with it or face very minor penalties was earlier of great concern. But now the message is very clear as tough punishments have been meted out even to youths. To address the phenomenon of loansharks using youths to carry out loansharking or related harassment activities, the act of an adult causing or procuring a youth below 16 years of age to conduct such criminal activities will be made a specific offence under the Act. The adult instigator will be punished with imprisonment for up to nine years and also liable to a fine and up to 12 strokes of the cane if the youth carried out the loansharking or related harassment activities.

Tougher penalties

Sir, it does not appear that syndicate members and their runners are deterred by the current penalties. Hence, we will enhance our punishments to send a strong message of zero tolerance for all loansharking activities. Mandatory imprisonment will be introduced for first time offenders who carry out or instigate harassment activities. Where the harasser does not cause any physical hurt or damage, caning will be introduced as an additional option to punish first-time offenders. In cases where hurt to persons or damage to property is caused, caning will not be an option, but a mandatory punishment, for first-time offenders. Loansharks who are first-time offenders will be punished with a fine and an imprisonment term which are now made mandatory, as well as caning as an additional sentencing option. Repeat offenders will be subjected to even tougher penalties. These enhanced penalties aim to deter those who are tempted by the profitability of loansharking businesses and, hopefully, also make our youths and debtors think twice before succumbing to the easy way out offered by loansharks. This deterrent

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message forms an integral part of the overall solution in tackling the loanshark scourge.

Immunity for accused persons who assist the authorities

Sir, persons who participate in organised criminal activities typically adhere to a code of silence. When arrested, many refuse to cooperate with the Police, preferring to go quietly to jail. Police faces an uphill task in getting these syndicate members and runners to cooperate with investigations, because they fear their kingpins more than they fear the law. As such, enforcing the law against organised criminal groups will be greatly assisted when evidence and testimony provided by the co-accused is forthcoming. Hence, similar to section 35 of the Prevention of Corruption Act, the Courts will be empowered to require a co-accused to provide evidence for the prosecution, issuing a certificate of indemnity to him if he does this. The evidence of a co-accused will be useful in obtaining information on the loansharking syndicates and securing successful convictions of loansharks.

Extra-territorial jurisdiction

Sir, we need to reach beyond the frontline and target the syndicate leaders. Some try to remain out of our reach by instructing local operatives from the haven of other countries. Loansharks who carry out, from other countries, unlicensed moneylending and related harassment activities in Singapore, should also be punished under our laws. Our Courts will be empowered to try an offence involving a loansharking business or which involves a victim in Singapore, even though the offence or part of the offence is committed outside Singapore. Through sharing of intelligence, our Police has maintained a good working relationship with its counterparts in neighbouring

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countries. Building on these networks, Police will collaborate with these counterparts to deal with perpetrators who are hiding overseas.

Addressing the demand side

Sir, whilst focusing primarily on the supply side, we are also aware of key issues on the demand side. Top of this is whether we should make borrowing from loansharks an offence. Since I first shared that MHA was looking at this issue some two years ago, we have received quite a lot of feedback on it. The views are mixed. Some argue that whilst many borrowers turn to loansharks because of gambling debts, there are also those who do so because of a genuine financial need such as a sudden unexpected bill to pay. Others point out that criminalising borrowing may drive the loansharking problem deeper underground, deterring borrowers from reporting instances of harassment to Police and, worse, from coming forward to seek help. This, in turn, may embolden loansharks to employ even more dangerous tactics against the borrowers. Sir, it is for these reasons that we have not proceeded to do this at this point in time but we will monitor the effects of the measures introduced in this Bill before reassessing our options.

Whatever it is, those who borrow from loansharks should understand and count the costs of borrowing from loansharks. Not only are they affected, their family and loved ones are affected as well. Owing loanshark money causes a great mental and emotional strain that can lead to dire consequences, as we all know. Whilst there is no excuse or sympathy for those who borrow from loansharks to feed their gambling habit, we do, however, empathise with those who face an unplanned, temporary and short-term financial squeeze. Sir, I urge people with a genuine financial need not to be tempted to take what they perceive as the easy

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way out by borrowing from loansharks. Instead, they should tap other channels – community-based ones, commercially-driven ones as well as grassroots-related ones – for help. Family members, relatives and friends can also lend a helping hand to help these unfortunate ones tide over their temporary financial squeeze.

Tightening the change of residence regime

Sir, on criminalising actions of borrowers, for now, we will specifically target one group of errant borrowers and these are borrowers who deliberately provide outdated addresses in their NRICs or use false addresses to mislead loansharks into harassing innocent households. To protect these innocent victims, we will make it an offence for a borrower to provide false contact information to a loanshark which results in harassment activities being committed against an innocent person. Offenders are liable to be punished with imprisonment for up to a year.

Sir, currently, home owners need only seek HDB’s approval when they sublet their whole flats. HDB intends to also require HDB home owners to register the particulars of their subtenants when they rent out rooms. This will make it harder for borrowers to remain untraceable when they rent a room in a HDB flat. In tandem with the new HDB initiative, the National Registration Act and Immigration Act will be amended to empower ICA to obtain information from HDB to enable it to more effectively administer and enforce the requirement to report addresses or a change of address. Hopefully, this will facilitate the tracing of those borrowers who move from place to place to avoid the loansharks but, in the process, cause innocent new home owners or subtenants to be harassed.

In November 2008, I moved amendments in this House to modernise and streamline our licensed moneylending

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regime, setting it on a more stable footing. As at end of last year, there were 218 licensed moneylenders, up from 173 at the end of 2008. Between March and September last year, which represents a seven-month period since these amendments came into effect, licensed moneylenders granted over $3.8 million in more than 1,700 loans to borrowers earning less than $20,000 per annum. This works out to almost 250 loans per month. These are all small loans where the amount is capped at $3,000, with the interest rate also capped at 18% per annum. Indeed, in the event of unexpected emergencies, such as defraying medical costs or meeting business exigencies, these low-income borrowers can borrow more than $3,000.

Besides licensed moneylenders, low-income borrowers are also able to obtain loans from licensed pawnshops which do not impose any minimum income requirement. As at November last year, there were 138 pawnbrokers, up from 114 at the end of 2008. In addition, there are Community Development Councils, constituency grassroots organisations, ethnic-based organisations like the CDAC, Sinda and Mendaki as well as member-based Thrift and Loan societies that those in need of financial assistance can turn to.

Sir, let me conclude. In conclusion, let me say that this Bill is not a panacea or magic bullet to eradicate the loanshark problem. But, hopefully, the measures will dent the intensity of loansharking activities. As I had explained earlier, unlicensed moneylending and loanshark harassment cases are not easy to solve. It is also not possible to fully anticipate new tactics loansharks will adopt. In short, the problem will not go away but Police will do its best to detect and punish all those who are involved in loansharking.

As always, I end the Second Reading speech by calling on everyone to press on resolutely. Continuing with our multi-pronged approach where the Police,

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relevant Government agencies, grassroots organisations, social support groups and other VWOs, parents, teachers, and I think all of us have a stake in helping to stem this tide. It is crucial that we pull together to tackle this scourge effectively. Let me say that, on its part, MHA will continue to actively monitor the evolving situation and the Police will come down hard on all loansharks regardless of what they do in the syndicate. In this context, Sir, I can say that this Bill’s key effect will be to make it that much harder for loansharks to perpetrate their clandestine operations in Singapore.

Sir, I beg to move.

Question proposed.

3.47 pm

Mr Hri Kumar Nair: Mr Speaker, Sir, I support the Bill.

Loansharks are a menace to society. They have no scruples. They prey on the weak and the desperate for money. They exploit the young to do their dirty work for them. Their chief weapons are intimidation, shame and violence. They think nothing of harassing and destroying the property, not only of their debtors but their innocent neighbours. They will vandalise houses even when the debtor is no longer living there, thus proving that not only are they nasty, they are also not very clever. Indeed, to call them sharks, I say is an insult to those creatures of the ocean. May I suggest cockroaches instead?

I therefore support amendments which will give the Police more teeth to rout this growing menace. From January to September 2009, there were 13,771 complaints, compared to 11,789 for the whole of 2008 and the figure was even lower for 2007. So this is a growing

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problem. We obviously need greater deterrents. I therefore support increasing the punishment for carrying out or assisting in the carrying out of illegal moneylending activities.

But as we all know, the real culprits are the kingpins and not the riff raff who do the running for them. For every runner we arrest, another takes his place. I therefore welcome the new measures to deal with the procurement of minors to carry out illegal activities. Likewise, the new power to freeze funds that the Police believe to be related to loansharking activities. By this, we can hit the syndicates where it hurts the most. To trace and uncover the funds, however, will be difficult but it is certainly worth trying. This may however cause hardship to innocent individuals and family members who depend on them. Could the Senior Minister of State therefore assure this House that this weapon will only be deployed in clear cases, and that where funds are frozen, the Police will expedite their investigations to minimise prejudice?

Sir, there have been calls to prosecute borrowers as well – to attack the demand to get rid of the supply. I have no doubt that some Members of the House will repeat this call. I hope we do not go that way, at least not for the time being. As an argument, it has logic. As a policy, less so. Most people do not go to illegal moneylenders and pay those blood-sucking rates because they want to. They are desperate. Borrowing from banks and other licensed institutions is reserved for those who are creditworthy. The typical customer of an illegal moneylender is not. His need for money may, however, be no less real or compelling than the next person. Not everyone has family or friends he can turn to for help.

More importantly, regardless of the reasons behind the borrowing, criminalising borrowing would have little deterrent effect on individuals who are

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desperate. It would only serve to compound their problems and, worse, those who depend on them.

But that is not to say that borrowers should be let off the hook. This Bill aims to criminalise provision of false information to illegal moneylenders. This is a good step forward as it punishes those who take loans and leave innocent third parties to face the despicable recovery methods. We should throw the book at them. But even this does not go far enough. How do we deal with those who provide correct information but subsequently change their place of residence? The problem is the same and yet they get away scot-free. They move out, fully aware of the problems they will be saddling future occupants with. The authorities would have details of these individuals and where they have moved to. There must be some way to make them accountable. Can they, for example, not be made responsible to make good the damages caused by the moneylenders?

We also need to help those who buy over flats from debtors and who may therefore unwittingly inherit the problem. Can the HDB not require the seller and the occupants to furnish a statutory declaration that they are not indebted to illegal moneylenders? If the seller comes clean or opts not to declare, the buyer can then decide with full knowledge whether he wants to proceed with the purchase. If the seller is eager to sell his flat, he will have the incentive to settle the debt. If the seller lies on oath, he can be prosecuted for making a false statement.

The proposed amendments are a good step in the mission to rid us of this illegal moneylending scourge. We can be sure, however, that the kingpins will try to find new ways to entrench and extend their business and keep one step ahead of the law. The Senior Minister of State has said that he will monitor how these changes

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have effect on the ground. I, however, urge the Ministry not to wait to see how these new steps work before introducing other measures. You see, the thing about cockroaches is that just when you think you have stamped them out, they tend to spring back to life.

Er Lee Bee Wah: Mr Speaker, Sir, I stand in support of the amendments made to the Moneylenders (Amendment) Bill.

Loansharking is a vice that strangles far too many innocent victims. In lieu of our upcoming casino launches, it is an absolute necessity that we suppress illegal moneylending and its accompanying myriad of social problems with harsher penalties before these issues escalate to unmanageable levels.

Senior Minister of State Assoc. Prof. Ho Peng Kee hit the nail on the head when he pointed out that penalties are practical when they are targeted at loan sharks' bank accounts. After all, the moneylending business is all about making profit. However, it is precisely this aggressive pursuit for ill-gotten gains that I fear may spur these loansharks to persist with their activities in spite of the increased risks of getting prosecuted.

Casinos are gold mines for loansharks. With the opening of two new casinos in Singapore, loansharks are likely to jump at the lucrative opportunity of baiting more borrowers trying to gamble their way to prosperity. To avoid run-ins with the law, they may bring their activities underground, find ways and means to get around the law and hire easily manipulated runners to cover their track. It is difficult to put a complete stop to loansharking activities as long as demand for easy loan exists. Innocent youths and school children now remain favourite targets as loanshark runners. The gullibility of these youngsters would enable the unscrupulous moneylenders to manipulate them just as the gangsters of

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yesteryears took advantage of their young egos and turned them into street gangs to do their bidding.

I ask that the Government put in place even stronger measures to prevent impressionable youths from being recruited as runners. These youths are easy preys because some of them may fall for the money, the challenge and the daring-do ego to become runners. These measures should go beyond tougher laws and punishment and venture towards identifying the root of the problem – why these youths are easy baits for loansharks. A recent media report gave some reasons from the viewpoints of youth loanshark runners. Broken homes and poor financial situations are not the main stimulants for delinquency as frequently assumed. Common reasons cited by these youths include peer pressure, boredom, money to satisfy material needs and paying off debts accumulated from online gambling.

The online gambling undoubtedly poses greatest cause for concern, but allow me to first present some general solutions for these troubled youths.

Parents and family members need to pay attention to their children's activities and their circle of friends. Teachers are already shouldering heavy responsibilities, but as schools have been noted as places where students get recruited into syndicates through friends, teachers, too, should keep a look out on suspicious behaviour and send students for counselling if required and alert their parents. As such, we need to look into developing more training programmes for school counsellors and volunteers in youth homes to counsel youths with such issues.

Largely populated and costly youth hangouts, such as arcades and night

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spots, are common places where loansharks recruit runners. Law enforcement teams may consider including such locations in operations for scouting out loanshark activities. I sense that the Police should put more resources on intelligence gathering of these groups of people.

The fact that more youngsters are getting addicted to online gambling is in itself an alarming occurrence. If they do not curb their gambling addiction, they will become social burdens to society, resorting to criminal activity to get money to feed their gambling needs, as some of them are already doing so by becoming runners for loansharks. We know that there is no end to the means to get illegal money and before long drug trafficking and organised crime would become part of their routine. We need to help these youths kick their gambling habits by designing specific educational and counselling programmes targeted at youths.

I urge the Government to do more to help these innocent and impressionable youths to get their lives back together after being arrested. Help for them should not merely cease at apprehending them for their crime.

With no more income source, perhaps no more friends and a poor education level considering that some of them may be drop-outs or expelled from school, they are likely to go back down the slippery road. These youths should be re-integrated into school and counselled on the consequences of their actions. In the long run, this will be more effective in steering them away from delinquency and crime. They are young and they still have a long way to go.

The number of youths nabbed for activities related to illegal moneylending and laundering has been on the rise over the past few years, from 12 in 2006 to 94 in October last year. This distressingly

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sharp increase is a strong indication that the involvement of youths and students in loansharking activities demands our attention. I hope my appeal for these youths to be given the opportunity to continue with their studies, to be given more counselling programmes and resources dedicated to this problem area will meet with your approval.

In case of the moneylending syndicate members, I think we should consider their crime as sufficient to consider meting out caning for the kingpins as well as detention without trial. After all they too are like drug dealers who prey on the weaknesses of their victims.

Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.20 pm.

Sitting accordingly suspended at

4.01 pm until 4.20 pm .

Sitting resumed at 4.20 pm

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[Mr Speaker in the Chair]:

MONEYLENDERS (AMENDMENT) BILL: Debate resumed.

The Minister of State, Prime Minister's Office (Mr Heng Chee How): Mr Speaker, Sir, thank you for allowing me to speak on this. This Bill has my fullest support. The loansharks have done much harm to Singapore. They have vandalised common property. They have terrorised not only the borrowers but also innocent parties, such as neighbours of borrowers or buyers of the targeted properties. When innocent parties are targeted and when these blatant perpetrators seem to be very hard to bring to book, then the residents' sense of security takes a hard knock. These loansharks also mar and undermine Singapore's hard-earned reputation of being a low-crime city and country, which

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is very essential for our social and economic attractiveness. The terror tactics of loansharks have gone too far, for too long. It is time for us to take the fight to them and we must be bold in our measures. We must hit them hard.

I, therefore, support the use of caning, on top of fines and jail sentences. I also support the raising of the fines and jail term ranges. This will enable our courts to send a clear message to these loan sharks. Our deepest disdain is, of course, for real loansharks with the money and who control the operation. They control themselves well and are hard to get at. But they are the source of the problem. If we cannot get at them effectively, they will have the means to spawn endless variety of tactics to further their objectives. As it is, they have innovated and expanded the pool of runners by having not only people they pay to work for them, but also borrowers to do that dirty work for them. We are tackling a Hydra. The new measures to freeze the proceeds of their loansharking activities will strengthen our hand against them. This will, hopefully, scorch the stumps of the Hydra's head with each loanshark syndicate that the Police are able to cripple, and curb their ability to regenerate and proliferate freely.

Aside from the real loansharks, or what the Senior Minister of State referred to as the towkays, two other groups of offenders deserve severe punishment. Firstly, the debtors who turn into loanshark runners. Even if they had turned runners for the loansharks because they cannot afford to pay their debts, this is no excuse for their acts of harassment and vandalism. If the loansharks see that the Government or the courts are lenient towards such people, or lenient towards certain profiles of such people such as if they are young, or old, or if they are female, then the loansharks will make more use of such kinds of people to be their runners.

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We must, therefore, be resolute and make examples of those who are caught so that no one will not hold the mistaken view that they will be let off lightly. Those who harass innocent parties like the neighbours of presumed debtors deserve even heavier sentences. Secondly, debtors who borrow using other people's identities and addresses. Such people are indeed despicable. They deliberately want other people to take the pressure and punishment from the loansharks on their behalf. Their victims could, for example, be those who bought over their flats not knowing that the seller chose not to update his NRIC address and would use the old address to borrow from loansharks.

I therefore support the new section 28(3) which makes the providing of false contact information by borrowers an offence. Besides the jail term of up to 12 months that is proposed, I would also ask that the courts be given the additional option of caning, especially for those who are recalcitrant. I would also like to seek clarifications regarding the following:

Section 28A – on Abetment – This section focuses on those who instruct others to commit an act, or who arranges transport or lookouts to support an act. I would suggest that those who knowingly assist in arranging and/or providing any kind of logistical support, for example, materials such as paint, chains, locks, glue, pig heads or incendiary materials which also come under the definition of abetment.

Section 28B – It makes it an offence for someone above the age of 21 to cause or procure someone below the age of six to commit an offence under the Act. I assume that the intent of the section is to deter the procuring of minors to commit an offence under this Act. If that is the case, then what happens if the offender is

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less than 21 years old, for example, a 19-year-old procuring a 15-year-old? We must not leave a gap for the loansharks to exploit.

Third, the related amendments to the Immigration Act and the National Registration Act that require the HDB to disclose relevant secret or confidential document or information to the authorised officer for purposes of this Act. If the intent of these amendments is to facilitate the intelligence collection pertaining to the whereabouts of loansharks or their operating locations, why limit these requirements only to the HDB? Should it not also include the legal owners of private residential, commercial or industrial properties?

Mr Speaker, Sir, loansharks are a defiant lot and a menace to law and order and a threat to our people sense of security. We must deal with them firmly and cripple them. May these amendments give us the tools to do this faster and better.

Sir, I support the Bill.

Ms Joscelin Yeo (Nominated Member): Mr Speaker, Sir, thank you for this opportunity to speak on this Bill. It is true that this scourge is not unique to Singapore and it is of great comfort that steps are being taken to address the illegal and menacing acts of loansharks in Singapore. It is disturbing to hear the number of incidents that occur every year. I have personally witnessed the disturbing and damaging effect that such activities have on the members of our society. Two friends of mine who have been working for about two years since graduating from university are about to get married and have recently purchased their new flat. This is a time that should be a joyous occasion for them as they are preparing to embark on the next phase of their lives together.

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However, it is disconcerting to see how people can spend large sums of their hard-earned savings to purchase a flat and even before their wedding date and any opportunity to enjoy their new flat, it has been vandalised on at least two occasions by loansharks who were, in fact, attempting to harass and intimidate the previous owners.

Clause 7 seeks to amend section 28 which increases the penalty for the harassment and intimidation of any borrower or surety, any family member of a borrower or surety, or other person. Clause 4 seeks to increase the penalties for the offence of unlicensed moneylending and to introduce new penalties for individuals who operate in like manner including imprisonment terms and even caning at the discretion of the court, while clause 5 seeks to insert a new Part to provide for the freezing of proceeds of unlicensed moneylending to prevent these from being used for unlicensed moneylending.

Sir, I am glad to see that these proposed amendments address the seriousness of these illegal activities by increasing the penalties mete out to these offenders and by empowering the Minister to cripple the perpetuation of these activities by freezing the related assets. On top of this, given the rise in the number of youths caught in loansharking activities, it is good that adults who involve youths under the age of 16 be subject to severe consequences to give them pause for thought before influencing our youths in such a negative manner and way of life. Those adults who influence our youths to be involved in their illegal activities are endangering and potentially destroying the lives of our future generation. The youths at this age are at a pivotal stage of life where they are extremely susceptible to the appeal of the sense of acceptance and trust the loansharks provide through the

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empowerment to carry out certain tasks and responsibilities.

As such, I find resonance with clause 8 which seeks to insert new sections, in particular, section 28B, which carries the liability of a jail term as well as a fine for those who cause or procure a minor to commit an offence by participating in their illegal activities. I believe that such steps are important in protecting our future generation from the negative influences of loansharks.

We must ensure adequate protection is in place for our young people at every stage of their life, whether below the age of 16 or below 21. May I ask if the Senior Minister of State has plans to increase the penalty for adults involved in influencing youths between the age of 16 and 20 to participate in loansharking activity?

We must also recognise that youths between the age of 16 and 20 carry natural influence in the lives of those under the age of 16 due to the closeness in age and frequent interactions in various youth social settings. Therefore, measures must also be taken to adequately deter these young people from influencing their younger counterparts from becoming involved in loansharking activities. May I ask if the Senior Minister of State has plans to strengthen the deterrents to prevent such negative influences from taking place?

I feel that all of these steps are necessary to protect and preserve the future generation of Singapore. The seriousness of these acts demand the adequate severity of the penalties that must be imposed. They must be brought to a place where they are prepared to sacrifice their own future before sacrificing the future of our next generation.

With these comments, I support the Bill.

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Mr Sin Boon Ann (Tampines): Mr Speaker, Sir, I rise in support of the Bill.

Loansharks are a scourge to our society and a bane of our existence. They intimidate innocent and helpless people and damage properties almost with impunity. For many of us here in this House, almost not a single week passes by without hearing stories of some families with paint thrown at their door steps or walls defaced with some profanities or calls for debts to be paid. For many, this form of harassment causes great stress and mental anguish. The harassment affects not only the families of the borrowers, but increasingly also their neighbours as well; as harassment is carried out on the premise that neighbours will help to put pressure on the family concerned.

We have amended the Moneylenders Act several times in recent years. Quite obviously, the frequency with which we are amending the Act suggests that the Government is paying much attention to the problem of illegal moneylending. The question is, will the amendments this time round go far enough to fix the rising menace of loansharking?

Indeed the current round of amendment seeks to comprehensively tackle the problem, including among others, making it an offence for anyone to participate even indirectly in the activity, giving the authorities the wide ranging powers to freeze bank assets, and making it an offence to get a minor involved. While I am happy to see determined efforts by the Ministry to deal with this scourge, I am not sure if the Government could have gone further in the current revision. In this regard, I have some comments and observations to make.

First, as with any business, stamping out the demand side of the equation will have a severe impact on the viability of the undertaking. Loansharks feed on the

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demand of the people for credit. If a way can be found to substantially curtail the demand for such loans, there will be less incentive for loansharks to stay in business. The anticipation before the introduction of the present Bill was that the Government was going to make borrowing from loansharks an illegal and criminal act. The belief is that criminalising such acts will deter and discourage many from approaching loansharks as a convenient source of credit. Unfortunately, when the Bill was finally presented, this provision, to the surprise of many, was not included. I note the explanation of Senior Minister of State in not wanting to introduce such a provision at this time. Principally, the Government accepts that many people turn to loansharks out of genuine financial hardships. In the circumstances, they should not be criminalised. While many may be sympathetic to the reason, that alone should not be sufficient to mitigate the act of encouraging loansharks in business. We should only make borrowing a criminal offence but leave it to the AG's office to determine prosecution policy in such cases, just as we do not necessarily make all killings murder.

Secondly, together with the proposed criminalising of borrowing from loansharks, the Government should put in place a programme to vastly expand the number of licensed moneylenders in Singapore, which I note from the Senior Minister of State's speech, the Government has been doing. The problem that feeds the business of loansharks is that people who need money for the short term, and these are not necessarily people who cannot pay, do not often qualify for bank borrowings. Also the credit cooperatives that exist are often linked to labour unions and not everyone is a member of a labour union. Reforming and reorganising credit cooperatives to make credit facilities widely accessible to members of the public will give people a wider option of places they can turn to if

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they are in need of cash in the short term and not just the loansharks alone. I am pleased to note that the Government has recently increased the number of the licensed moneylenders. I would like to ask the Senior Minister of State, whether he is satisfied as a consequence, credit would now be made easier to the people, who needs it without having to resort to loansharks.

One question which has arisen is whether our Government should put a cap on the amount of interest that providers of consumer credit may charge for the borrowing. In many countries, the law puts a cap on the amount that may be charged on consumer credit. The idea presumably is to ensure that these people do not unduly take advantage of those who are vulnerable. Unfortunately, we do not appear to have such a restriction in our legislation. Perhaps this is something that we should consider in this House.

Thirdly, one big difference that this Bill makes is its attempt to extend its reach beyond our borders. One of the biggest challenges, as I see it, in combating illegal moneylending is dealing with loansharks outside Singapore. Unless these financiers are caught, prosecuting those who show up at the door steps of the borrowers will not stop others from stepping into their shoes. These financiers must be stopped. Currently in the present provisions of the Bill, the authorities are given the powers to freeze bank assets. This would include those who are indirectly involved as well. This ability is welcomed as it will hopefully dry up the source of funds that support such illegal activity.

While the principle of freezing assets is to be supported, the current legislation appears to apply only after the illegal operator is caught. I wonder whether the scope should be expanded to allow the Minister the powers to mandate banks to track a certain profile of accounts and

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fund movement based on intelligence gathered from investigations. This would strengthen the initiative of the authorities and make it harder for these crooks to operate here.

Fourthly, since loansharks are increasingly operating outside our jurisdiction, we should strengthen our efforts and resolve to work more closely with our counterparts overseas to smash these syndicates. At the moment, I believe there is extensive sharing of police information and intelligence. If we could improve on our framework for repatriation of criminals while deepening further the extraterritorial reach of our legislation by making it an offence to operate money lending business here from overseas, it would be a major milestone indeed in our efforts to combat this problem.

Finally, I think more efforts can be put in by the Government through its public education and counselling programmes. At the moment, illegal moneylending operates very much on the fringe of society. People who are involved in money lending, whether as borrowers or runners, almost to a person, I am confident to say, have personal problems that require help. For the young runners, it may be that they are forced to such activities by circumstance. For many, they resort to borrowing from loansharks out of ignorance about how to manage their money or where to turn to for help. In all these instances, I believe that a Government funded dedicated helpline will make a great difference and would in many cases help to avert a potentially disastrous outcome. Of course it may be argued that there are general counselling helplines out there that the desperate can turn to for help. While I would agree that such services are available, I would argue that a separate and dedicated helpline manned by trained staff who specialise in financial counselling and debt management will give it a very different signature and profile than is presently the case.

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We all agree that loansharking is a very serious social problem that must be dealt with in all urgency. Can we effectively deal with the problem? I believe we can, provided we are prepared to demonstrate the firm resolve and determination. In fighting this scourge, there can never be half measures. One indication of the dedication and commitment would be the relative percentage of the budget that is allocated to dealing with this problem. Are we committing enough resources to deal with this? Is the Minister prepared to pour more money into this? If he is, I am very confident that this problem with loansharks here in Singapore, or as my colleague would call it, the cockroaches in Singapore, can be overcome.

With that Sir, I support the Bill.

Mr Arthur Fong (West Coast): Mr Speaker, Sir, thank you for allowing me to speak in support of the Bill.

The amendment to the Moneylenders Bill is necessary to check the growth of illegal moneylenders and the associated activities that have affected many innocent parties. These activities cannot be left unchallenged as they are significant ill-effects on the society and the law and order of the country.

Sir, many Members of the House had, over the last few years, cited experiences of residents in their wards, we just heard of a few today. Innocent parties, like older folks and young child who are at home in the day, bear the brunt of the loanshark runners when their homes are beset.

MHA reported that harassment activities has surged from 4,759 in the first half of 2008, to 9,395 for the same period in 2009. This is so even after the introduction of stiffer penalties and

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invoking the Criminal Law (Temporary Provision) Act in 2005.

What is worrying as MHA had pointed out is the evolving tactics that have terrorised many heartland families. A family in my division sold their flats after two years because of persistent harassments from loanshark runners. They moved in with their in-laws within the constituency to facilitate their children's schooling. They are unable to afford to purchase another flat in the area as the prices have moved up over the last few years. The loanshark harassments have indeed affected the family in many ways beyond terrifying the young and the old, but have also set the family back financially. They have used up one bite of the HDB loan cherry, they have to contend with resale levies and to have their growing children cramp into their in-laws' flat.

On another visit to the block, another frustrated family related how the loanshark runners had splashed paint through the open front door of their flat narrowly missing their young child's eyes as he sat in the living room watching the television. Apparently, the family and the loanshark runners know that the unit that was borrowing was actually five floors above their targeted unit, and that the borrowers had moved five years ago.

Sir, at the recent MPS, an exasperated uncle was in tears when he came to seek to appeal to the authorities who have in custody of his nephew to require his nephew to change his address. You see, his nephew whom he only sees on and off for about the last 10 years, has been borrowing from loansharks and the debts squats have been harassing and other family members, damaging property most of the time. His neighbours were empathetic but their empathy and understanding have worn thin and his once friendly neighbourhood of 20 years has now evolved into a tense environment for the last few years.

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This is a move that has been anxiously awaited for, and will go a long way towards alleviating the suffering of those who have become victims of loansharking activities. I would have opened my speech with the reference to a timely and necessary amendment but left out timely in the opening. The amendments are significant and I am sure my colleagues and families who are being harassed will applaud the changes introduced. I would say that although the amendments have come a little late for some of the families I have cited earlier, late is better than later. I am also happy to hear from the Senior Minister of State that the Police are actively monitoring the situation. While I appreciate that monitoring because of operation reasons has to have a low signature, I think the victims and households could be kept informed of what the Police are doing.

My Town Council and property managers and contract workers as well as HDB would join the residents in welcoming the amendments. Mr Speaker, Sir, I think as significant as the changes are welcome, I am not certain that it will leave an indelible mark (pun intended) here, and definitely not a strong enough signal to loansharks and particularly the loanshark runners.

I urge the Minister to consider a stiffer penalty than those proposed, specifically on section 14(1), the revised penalty for first time offenders, who are unlicensed moneylenders, is a mandatory imprisonment term of not exceeding four years and an optional caning of not exceeding six strokes. I would like to urge the Minister to consider invoking a minimum imprisonment term of two years not exceeding four years, and a mandatory caning of two strokes not exceeding six strokes.

For repeat offenders, to invoke a minimum imprisonment of three years, not

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exceeding seven years, a mandatory caning of three strokes not exceeding 12. On section 28(1) and (2), harassing borrower, besetting his residence, etc, the revised penalty of mandatory imprisonment not exceeding five years for first offenders, I would like to urge the Minister to consider invoking a minimum imprisonment of three years not exceeding five years, and a minimum caning of two strokes, whether there is property damage or a person is hurt. For repeat offenders, to invoke a minimum imprisonment term of four years not exceeding nine years.

We have been successful in our war on drug abuse by sending a clear and definitive signal as the types of drugs and tactics and modus operandi changed, our drug enforcement officers have kept ahead most of the time of the criminals and the addicts. I feel that if we let unlicensed moneylenders and loanshark runners staring up the barrel with minimum punishments, I am certain that we can alleviate this increasing problem.

Loansharking and thuggery goes hand in hand. The thuggish behaviour of loansharks in trying to recover their monies exists not just in the movies. In some instances, the thuggish acts of loanshark runners are not confined to just those of their debtors. Many times, the harassment acts include defacing public properties such as lamp-posts and common walls of HDB flats. This is an affront to law and order and brings to the community a feeling of being under siege.

We must show that there is zero tolerance for hooliganism, thuggishness and gangsterism. Have we sent a strong enough signal with this amendment? Sir, I think we can. Let us not miss the opportunity to give the innocent parties a chance for some relief and a message to all unlicensed moneylenders and would-be illegal lenders and their runners.

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As early as 1993 when Prof. Jayakumar moved an amendment to the Moneylenders Act, the then Commissioner of Police had also signalled the intent of the authorities that such illegal acts of vandalism and harassment will not be tolerated. In fact, Prof. Jayakumar informed the House that while the amendment to this Act was in process, the Police had told him that there was already a dampening effect on the scourge of illegal moneylending harassments.

Sir, I am happy with the inclusion of new section 28B (Offences involving minors below 16), and I join my fellow Members in applauding this. This has implications that include our efforts to reform wayward youth, our concern and care for youth at risks and the curbing of future serious crimes committed by such minors as they become more brazen by being involved as loanshark runners and activities like that of besetting residences. I am hopeful that this new section will reduce the pool of runners for the loansharks to prey on.

I am also glad to hear that there will be a tightening of the Change of Residence Regime and this will definitely go some way in reducing the anguish and tension of residents, like the gentleman and others like him who came to my MPS.

I support the amendments.

4.47 pm

Mr Calvin Cheng (Nominated Member): Mr Speaker, Sir, thank you for allowing me to speak on this Bill. I rise in support of the amendments to this Bill. The media reports of the scourge of illegal loansharks increasingly plaguing innocent families is troubling . Like my hon. colleague Er Lee, I fear that with the imminent opening of the Integrated Resorts, this may worsen.

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It is indeed an appropriate time for Parliament to make the penalties harsher for unscrupulous illegal moneylenders. However, I have three concerns concerning this Bill.

The first pertains to the distinction between body corporates and individuals that runs throughout the proposed amendments. Ostensibly, body corporates face a lighter punishment than individuals, in the sense that the maximum punishment they face is a fine, albeit higher than individuals, whereas individuals now face a mandatory jail term, and even caning. This poses the question whether more savvy illegal moneylenders will get away with less, by incorporating a company before they make their illegal loans, whereas the less sophisticated ones who lend as individuals get heavier punishment. In a business analogy, the sophisticated moneylenders who run private limited companies have their legal liabilities protected by their body-corporates, whilst the more ignorant chaps who run sole-proprietorships feel the full force of the law. In order to plug this loophole, may I suggest that the directors of these body corporates, their employees and associates are also punished as individuals under the Act.

My second point concerns the mandatory jail terms that individuals face. Although a mandatory jail term serves as a much higher deterrent to possible offenders, it also ties the hands of judges during sentencing, especially when considering mitigating factors. Some of these mitigating factors may be strong; for example, it is not unheard of for people in debt to these loansharks to be forced into working for them. This is especially so, given the ruthlessness of these loansharks, if these people break the law in fear for their lives or the lives of their loved ones. Judges should be allowed to consider these factors when sentencing offenders and a mandatory jail sentence may be too harsh especially in

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cases where the perpetrators offend under threat or fear for their lives. Will the Minister consider raising the jail terms whilst not making it mandatory? In this way, the deterrent is still increased, without restricting judges when considering mitigating factors.

Finally, the Bill does not distinguish between illegal moneylenders and those acting on behalf of them. In layman parlance, it does not distinguish between the loansharks, the leaders and their runners. I thank the Senior Minister of State for his clear explanation for the rational behind this and I do understand that within these organisations, it may sometimes be difficult to distinguish between the loansharks and their runners, especially with runners often being promoted to more senior positions in the organisation. In addition, these runners are the hands and legs of loansharks and by cutting them off, we reduce the ability of syndicates to operate. These are also the people who directly terrorise people. However, it is also true that these masterminds, who in the words of the hon. Mr Heng, spawn the evil beneath them. I hope that the Senior Minister of State can consider in future much stiffer punishment, especially lengthy jail terms for these leaders when they are caught.

Other than these points, Mr Speaker, Sir, I support the Bill.

4.51 pm

Ms Irene Ng Phek Hoong: Sir, I welcome the harsher measures to crack down on loansharks. The loanshark menace has been an increasing scourge in our HDB heartlands.

In our MPS, it is increasingly common to see desperate residents appealing for the Police to act against loansharks and their runners who have been spraying paint on their doors and harassing them, even though they were not the borrowers.

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Some residents had to come back repeatedly to the MPS, as the Police had not taken any action despite their many reports to them. One example I can give is a resident who came to me. She faced harassment for over one-and-a-half years after moving into her new flat in Tampines, although she had never borrowed from loansharks. She believed that the debtor was the previous owner of the flat. She had reported the loanshark harassments to the police in June 2008, and again in December 2008 when there was no action taken. I wrote to the Police twice on her behalf. The latest was in July 2009. It took several appeals before we received a reply from the Police to say that it has stepped up patrol at this resident’s block. During all these many months, however, the resident is still left wondering why the loanshark had not been tracked down and caught, even though she had given the loanshark’s phone number to the Police.

I would like an assurance from the Minister, that with these tougher laws, there will also be a more robust and active response from the Police in cracking down on loansharks and their activities. The Police should take the complaints of the residents seriously and act on them and not just take down the reports with little concrete to follow up. It will leave us in a helpless position if all that is being done is for Police reports to be filed.

Sir, earlier on, our colleague, Mr Hri Kumar mentioned that the loansharks are more like cockroaches than loansharks in the way they behave, given their nature. So there is an important difference in this case because cockroaches do not breed fear among people generally, but sharks do. If you talk to residents who have been harassed by loansharks, they are fearful, they live in constant worry for their children and their own family. So I think it is important that when we treat the loansharks, we treat them as a menace,

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they are evil – like Mr Heng Chee How mentioned – but it is important that we also bear in mind that we have to tackle the problem as the fear persists on the ground and as long as the fear persists, the trouble with the loansharks will persist.

Sir, we need to be tough on loansharks, their recruiters and runners. But we should also be tough on the root causes that fuel the demand for loansharks. From my discussions with social workers, I understand that many who turn to loansharks are gambling addicts. Increasingly, they also include youths who are addicted to betting on the Internet. They will be desperate for money as long as their addiction remains.

If they could not turn to loansharks, in their depths of anguish and desperation, they may be driven to other actions for money, such as crime – which could be mugging or robbery; for women, it could be prostitution; and for others, perhaps, even suicide.

A social worker told me of a case involving a 16-year-old student who is addicted to Internet soccer betting. His gambling debts amounted to about $30,000. He told his parents he would commit suicide if he could not continue gambling online. His parents were desperate and worried. So they paid off his debts, and not only that, they also continued to finance the gambling of their son by giving him $200 to $300 to gamble every week. Not knowing what to do, they went to see a social worker. They were at the end of their tether – what to do with their son. Their son refused to seek help for his gambling addiction. The son refused to consider it as a problem. But, Sir, that is the problem.

Bailing people out may be an easy solution but it has no effect on the habit.

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Such cases are worrying counsellors, who are seeing more young Singaporeans hooked on gambling online. Another social worker told me about a middle-aged taxi driver, also a gambling addict, who borrowed from 41 different loansharks to pay his gambling debts. 41! He just could not stop gambling. So he hopped from one loanshark to another. It is such addicts who feed the growing loanshark machine.

Sir, if we want to tackle the problem of loansharks, we need to also tackle the problem of gambling addiction. Reverend Dr Edward Job, who runs One Hope Centre and the Christian Care Services centre, is among those who are convinced that this would help to diminish the loanshark business. I had a meeting with him to find out more about the problem and he told me that about 90% of those who come to him with loanshark problems are gambling addicts. He would help them negotiate with the loansharks on their debt repayment, on two conditions: firstly, they have to attend weekly support groups for their gambling addiction; secondly, they need to bring along their wife or a family member to these sessions.

There are those who borrow from loansharks because they have financial difficulties, but their numbers are not many. This is because, for those in financial difficulties and out of work, we do have a safety net, especially the Comcare. However, not all want to come for hand-outs or they do not qualify, especially if they need large amounts of money to the tunes of thousands. For some, it is a matter of maintaining a comfortable lifestyle. For others, it could be a desire to start a new business.

The question is where could they borrow such large sums of money, with a poor credit record. Given the present situation, I find it hard to agree with those

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who call to criminalise borrowing from loansharks. If we criminalise acts of borrowing, we will only be adding to the pool of people with criminal records. This will not solve anything – indeed, we may well be aiding the work of loansharks for we know that many of the runners today are ex-convicts who could not find proper jobs.

Sir, I urge the Government to take a more holistic approach to the problem, beyond tougher enforcement. They should include the following:

First, an education programme about gambling addiction aimed at youths;

Second, regulate internet gambling to protect youths from compulsive gambling. Make it a requirement for licensed operators to block minors from gambling online;

Third, step up counselling and support for gambling addicts and their families;

Fourth, continued and improved support for ex-offenders to find jobs and to integrate them into the mainstream; and

Finally, we should review our credit policies and schemes to ensure the availability of ready loans for cash-strapped individuals. We should encourage the growth of cooperative banks and micro-credit loan programmes to cater to the financial needs of the poorer segment of the population, which is now largely ignored by the existing large banks.

Only with all these pieces in the picture can loansharks be defanged.

With that, I support the Bill.

4.59 pm

Mr Christopher de Souza: Mr Speaker, Sir, I express my firm support for this Bill.

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The measures are bold. They target the business owners, ie, the chief operators of illegal moneylending syndicates. So they target upstream but they also target the runners who indiscriminately harass borrowers and innocent residents who may not have even borrowed from them; therefore, targeting downstream. Before I go on to give reasons why I support the Bill and why I think the Bill could be further finetuned to add more robust regulation, I would like to say that my constituency, Ulu Pandan, and the grassroots leaders and the community partners there, will give our full support in carrying out the enforcement and having a community partnership to ensure that this activity is deterred in the constituency and it will be part of our Workplan Seminar next week.

In particular, I would like to express my support for the new section 28C, which makes it an offence for a person to provide false contact information of a borrower to an unlicensed moneylender. This is a step in the right direction and will go some way to protect innocent homeowners from harassment.

Mr Christopher de Souza: 5.01 pm

Next, I would like to express my support for the introduction of the new section 5(1A) which treats a loanshark who operates his business in Singapore from a location outside Singapore as having operated the business in Singapore. This is a far-sighted move with the long arm of the law to match. With the help of high technology and our online connectivity, more loanshark operators may operate their illegal moneylending activities here in Singapore while they remain physically beyond our jurisdiction. With this legislation, we will be able, among others, to request for such

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operators to be extradited to Singapore once we track them down.

I support the amendment of section 14(1), to increase the penalties for first time offenders from between $20,000 and $200,000 and imprisonment of up to two years, to between $30,000 and $300,000, and with imprisonment of up to four years, and possible caning of up to six strokes. I believe these measures are commensurate to the gravity of the offence and will help deter potential loansharks and runners from joining this illegal trade.

Of particular concern is the current practice by some loansharks to use students and minors to harass borrowers. Of the 136 youths caught in the period between October 2008 and September 2009, almost 50% were students. A new section 28B has been introduced, which makes it an offence to recruit a minor (under the age of 16) to commit an offence under section 14 which is unlicensed moneylending or section 28 which is harassment and intimidation. I believe this amendment will have significant impact and look forward to hearing an update from the Ministry on the reduction in the number of such young offenders in the near future.

I also fully support the introduction of the new Part IIA comprising new sections 15A to 15H which seek to deter the business of unlicensed moneylending. The provisions to freeze the assets of suspected loansharks will help to stall their operations and prevent them from expanding. Another significant amendment is the new section 32A which provides members of syndicate networks immunity from prosecution in exchange for information which will enable our law enforcement officers to track down other members of the syndicate, thereby providing a potent pool of prosecution

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witnesses for prosecutorial and enforcement purposes.

The illegal moneylending business is organised crime with a long history. To counter this deeply-rooted problem, we need a complete arsenal of weapons. I n particular, I wish to highlight the following concerns about illegal money lending:

First, loanshark and harassment cases have gone up from 10,221 in 2006 to 11,789 in 2008. There were 13,771 cases from January to September in 2009. Information from counsellors suggests that more than 90% of those who turn to loansharks are gamblers.

Second, the problem will worsen with the opening of the two Integrated Resorts, coupled that with the problem of online gambling.

Third, from conducting house visits in my constituency, I have first-hand experience that the whole corridor suffers when loansharks throw paint on doors and graffiti the walls and lifts. It dampens the mood, it depresses the mood. It creates an atmosphere of fear and depression. Can you imagine the effect on the children living next door? Why should innocent neighbours have to suffer?

Fourth, as mentioned earlier, innocent residents have to bear the brunt of harassment if a false residential address is given.

I have previously suggested in Parliament that the Ministry consider making the very act of borrowing from unlicensed moneylenders an offence. I have previously cited two pieces of legislation (the Misuse of Drugs Act and the Prevention of Corruption Act) as examples of effective legislation where the Government has tackled both the supply and demand side of the problem. It is under the Misuse of Drugs Act an offence to consume drugs, that is,

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demand and also to traffic drugs which is supply. While I support the measures in this particular Bill, which seek to reduce unlicensed moneylending by deterring the supply aspects of the offence, I urge the Ministry to give further consideration to making the very act of borrowing from unlicensed moneylenders an offence. This will enable the law to also contemporaneously, simultaneously deter the demand for unlicensed moneylending. Naturally, as Mr Sin has said, the Public Prosecutor will have the ultimate discretion whether to prosecute a borrower, and unique circumstances prompting a compassionate approach would likely merit non-prosecution. After all, there is nothing innocent about a borrower giving a false address to a loanshark knowing that an innocent household will be harassed.

I would like to quote an extract from a very good article dated 10th January 2010 by journalist Teh Joo Lin, to show the extent of how innocent parties suffer from the giving of false addresses by people who borrow from loansharks:

"Step out of the lift on the 10th floor and you see a dozen notices in English and Chinese.

They are plastered on the walls and ceiling of a corridor leading to a four-room flat in Sengkang.

One notice reads: 'Ex-owner ... has moved out ... for a year plus. Please stop disturbing us, thanks!'

Above the door of the flat, two electronic eyes scan both sides of the walkway, recording every moment.

These 'fortifications' are the work of a young couple, the Ongs, who have been defending their first home against loan sharks since last July."

Why should innocent residents have to spend money, time and energy defending and protecting their homes? It is logical to

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consider seriously and implement making an offence of borrowing from loansharks. Also, there is a possible counter-argument to that now, that if you give a false address, you can be prosecuted but that goes only so far. What if you do not give a false address? Why if you actually give your own address and the loansharks harass your neighbour? That borrower has not committed an offence yet his innocent neighbour or his neighbour five floors down, to use Mr Fong's example, are being harassed. So I think we need to seriously consider taking that bold step, if these measures do not seek to achieve the lowering of the numbers which are increasing from year to year. Therefore I support the amendments but seek the Minister’s reply on my proposal which attempts to make the regulatory framework tighter and more effective.

Thank you, MHA, for the bold measures. I think they are indeed bold, they go upstream as well as downstream, contemporaneously but would the Minister consider going that further step if indeed the measures do not achieve the result that they are seeking to.

Ms Audrey Wong Wai Yen (Nominated Member): Mdm Deputy Speaker, thank you for allowing me to join this debate.

It is quite clear from what has already been said in this House that this is a matter of great concern to everyone. All the anecdotes we have heard so far, you know, from residents whom MPs meet at the meet-the-people session to personal anecdotes of people we know who have had the flats being subject to paint splashes and so on, it shows that this is such a widespread problem. As such, I rise in support of the Bill.

The proposed amendments to the Moneylenders Act does comprehensively tighten the laws on loansharking, which I have mentioned, is a growing problem. The proposed amendments will allow the

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authorities to deal not just with the person who is running the business but his associates and all those who knowingly assist his business. The Bill spells out clearly that anyone who assists in this business, whether collecting payments on behalf of the loanshark, disposing of proceeds from these activities, allowing his premises to be used for this so-called business – acting as a lookout or runner and so on – will now be deemed an offender. In addition, I welcome the introduction of a new provision for the freezing of proceeds from illegal moneylending. Part IIA of section 15 which allows the authorities to comprehensively deal with offenders.

Among the stricter laws, I am particularly heartened to see that the new section 28B offers protection to minors below 16 who are led to committing criminal acts on behalf of loansharks which can cause serious injury. Some young people may not be aware but what they do could actually cause injury or even death. More youngsters have been recruited to do the dirty business of loansharks such as setting fire to people's property or vandalising. These youths usually come from troubled families. They have poor school records and other difficulties in life; they deserve to be given guidance and not be led into a life of crime. Hopefully, the new section 28B will cause loansharks to think twice before recruiting these youngsters but, of course, I believe it would take more than just legislation to fully tackle this problem.

I was intrigued to read another amendment in section 5, where a new subsection has been introduced; stating that "a person who wholly or partly carries on, from a place outside Singapore, the business of moneylending in Singapore shall be taken to have carried on that business in Singapore". I would like to query if there are foreign illegal

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moneylenders operating in our midst, and if this amendment is being introduced in view of concerns of the opening of the Integrated Resorts where we can expect an international clientele patronising the casinos, and therefore possibly attracting foreign loanshark syndicates. I am sure we have all read stories and know of the stories about patrons of casinos in Genting and other places where they have been approached by moneylenders offering immediate loans right outside the casinos. These moneylenders could "migrate" to our shores and it is not unreasonable to assume that they too would want to globalise their business. It is undoubtedly easier with today's technology to internationalise all these illegal moneylending activities and as the Senior Minister of State has mentioned, such syndicates are also involved in other organised crime activities.

The Bill also proposes a new amendment to section 15 of the Immigration Act which empowers immigration officers to request for information from the Housing and Development Board. This suggests to me that perhaps foreigners could be involved in this business, or are perhaps themselves also victims of loansharks in Singapore. And if they are foreigners, they may not know what to do or where to turn to for help if they are being victimised.

I would like to ask for a clarification of this amendment.

While I am in support of the stricter laws proposed in this Bill, I am also concerned that enforcement of these laws will also have a ripple effect on those who have been driven to borrow money from loansharks and have been victimised. One concern is that stricter laws will drive loanshark activities further underground, making it harder to track them down and deal with them if they continue to harass those who have borrowed from them and those who have borrowed may feel more

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stigmatised and less willing to come forward to ask for help. People who resort to borrowing from these sources are often desperate, with little family support and nowhere to turn to and many of them also have gambling problems. In the financial downturn of the past year, it is not unreasonable to assume that many people might have found themselves in this perilous state, especially if they have been suddenly hit by large expenses such as medical bills.

While the Government has assured Singaporeans that the poor and needy in our midst will be looked after, and have regularly enumerated the various programmes offered by the government agencies, CDCs, other organisations and charitable institutions, perhaps our current efforts to educate and reach out to the truly needy and desperate are still insufficient to help this minority of people who resort to borrowing from illegal means. As living costs continue to rise and the wages of the lowest-earning in our population may not keep pace with the inflation rate, I am concerned that we may see more financially desperate Singaporeans who may

still go to loansharks or work for them despite the risks. I would like to urge the MCYS, other state agencies and all the grassroots organisations to organise and promote more financial literacy programmes among those who need it the most and reach out and educate those who are so desperate that they are unable to see beyond their immediate crisis. Perhaps, there could also be more community level counselling programmes for those who have been forced to borrow from loansharks and their families to add to the efforts to curb the gambling problem in Singapore.

I am glad that in the proposed legislation, the Act of borrowing from loansharks has not yet been made a criminal offence. I believe that by doing so, it would only punish those who are most genuinely in need and would also

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simply drive these illegal activities further underground, making it deeper to really root them out. As for debtors who end up working for loansharks as runners and repeat offenders – I know there are many repeat offenders who go to jail for loanshark activities and repeat their behaviour when they are out from jail – the new stricter laws may act as a deterrent but I believe the truly desperate would still continue to run the risk of the harsher punishment under these new laws and these only play into the hands of the loanshark syndicates. I would like to suggest again that all the relevant agencies and other grassroots organisations take action to rehabilitate these repeat offenders, so that they do not keep falling prey to the loansharks who might have been their former "employers".

Illegal moneylending syndicates no doubt are causing social problems. Like most problems, they are probably best dealt with in a multi-pronged approach, with co-ordination and support from many different agencies, from the people and from and the State.

With that, I support the Bill.

5.17 pm

Assoc. Prof. Paulin Tay Straughan: Thank you, Mdm Deputy Speaker. I am going to just ditch my prepared speech because I have been learning from my fellow Parliamentarians. Before listening to them, I took a very academic approach. But I think that from the perspective of MPs who have to see the victims day to day and who have to answer to their constituents, they certainly bring a different perspective. Looking at the issue that this particular Bill is dealing with, I think there are two main concerns.

The first is the illegal activities of moneylenders, so that is supply. That would not have existed if there was no demand, and that is the borrower. So I

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would like to indulge in talking about two points, Mdm Deputy Speaker. The first is on the notion of borrowing. Mr Christopher de Souza is my MP. He has very strong views about what we should do with borrowers. I beg to disagree with him not because I am a liberal sociologist but from a sociological perspective and for the past few hours, I have been sitting there and trying to understand what would drive a person to turn to a loanshark for money? It must be out of sheer desperation. And I learnt from my fellow MPs that from what little we know, the bulk of borrowers tend to be people who are in debt, who are gamblers. I would like to just take this opportunity to appeal to the Minister to do two things. First is to invest resources, to try to have a better appreciation of who this "desperate group" is. And if indeed they are primarily gamblers, even gamblers deserve our help. Therefore the second call would be to continue to look at ways in which somebody who is in desperate need of funds, to see if there is a legitimate source for them to turn to. Many in this category, I suspect, will not have a strong informal social support. So to say that they should turn to family and friends is pretty much telling them to go down a blind alley. So, as a society, I hope that we will continue to put effort into creating legitimate formal sources of help for the vulnerable group in our community.

The second point that I would like to touch briefly on is the loansharks – the problem and the cause of frustration, trauma and unhappiness in our community. But in all the speeches that I have listened to this afternoon, I think the one blank spot that we have come up with is, no matter how stringent our laws are, at the end of the day, we may not get to the kingpins because we do not know how to find the "big boys". So instead, we starve them by cutting off the tentacles, the

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runners. And the House has called for very stringent punishment on those who are engaged as runners.

Initially when I had prepared my thoughts on this Bill, as some of you might have predicted, I called for a more compassionate approach. Many of these runners are teenagers and youths. They are not the direct source of the problem. But as I learnt more about the topic, I think that unless we can get to the core source, we have to do something. In this regard, I strongly support the Amendment spelt out in this Bill but I also like to impress on the Minister that in addition to this, we would put more effort into raising awareness among the youths and the school kids that being a part of this kind of illegal enterprise has very strong detrimental effects on innocent victims and to put greater effort into educating them so that no matter what the reasons are, for even thinking about engaging in such activities, they would be better informed.

Mdm Cynthia Phua: Mdm Deputy Speaker, I rise in support of this Bill which I felt should have come sooner though I must admit it, it is better than never. I speak for the silent majority of HDB home owners who have suffered silently for too long as the illegal moneylenders and their henchmen committing the acts of hooliganism and vandalism.

We have to take a two-pronged approach to resolve this problem. The first approach is to harness the legislative powers to block the current rise in illegal moneylending activities. The other prong must be to look into the social aspects of the problem if we want to treat the disease and not just the symptoms. Let me first focus on the legislative changes.

I am very pleased to see that we are going to throw the books at the kingpins and other hardcore henchmen by unleashing the powers of the Criminal

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Law (Temporary Provisions) Act. I believe the Criminal Law Act was also imposed on the infamous Chap Ji Ki kingpins that caused their operations to collapse and the rest is history. The imminent opening of the Integrated Resorts underscored the need for us to be even more vigilant to the nefarious activities of the local syndicates, before they become more bold and jostle for a piece of the business at the casino tables. On the freezing of proceeds of unlicensed moneylending, I would like this to be extended to include the wealth of the syndicate family members so that any attempt to hide the ill-gotten gains will be ferreted. Instead of having to seek the Minister's sanction, I feel that a Senior Police Officer should be empowered to freeze the banking account of suspected moneylenders and their family members, while they are under investigation and there is a good reason to suspect their involvement in the illegal activities. The Minister's empowerment can be sought for long-term freezing of the assets, or for any appeal against the Police freezing of the assets, perhaps on good compassionate reason, if necessary.

Going through the enhanced penalties for the illegal moneylenders, I note that the caning is optional for these offenders. Why is this so? They are a scourge and a menace to society and I call for mandatory caning. My argument is that their illegal acts inject fear and often caused harm to so many innocent families, putting them in misery and anxiety. These loansharks and their henchmen destroyed the security and peace of the law-abiding community and as such should be given the rod, just like other criminals who inflict bodily harm. Hence, canning should be mandatory and not optional if we want to rid our society of this menace.

For offenders who are a registered company, it is noted that the penalty is only a fine for the company. I feel the law should be tightened. After all, the

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company can just go for liquidation and another new company can be easily set up. I seek to ask that the Minister amend the law to assume that the directors of the company are actually involved in the offence and sentence them as individual illegal money lenders. The penalty should include compulsory caning and not optional caning as well. I would like to ask the Minister if he could enlighten the House whether this offence is considered sufficiently grave to enlist the help of Interpol should the investigations warrant the need for external assistance to track down the culprits overseas and also the culprits' overseas assets? I am pleased that the current optional penalty imposed under section 28 for harassment, will now be made mandatory.

I feel that we should make a strong impression on the would-be offenders that not only do they have to serve a mandatory fine and jail sentence, but they should be committed to perform community service for, say, 20 hours thereafter. These offenders should be made to perform tasks such as repainting of walls and railings in the HDB estates and other locations so that they get a taste of the hard work put in by the maintenance workforce. Let me give an extent of the damage that has been done in Aljunied Town Council estates. In 2008 and 2009, we see a total of 212 and 378 cases respectively. The total amount that was spent on the residential estates to rectify all the vandalism is $49,833 in 2208 and $69,370 in 2009. It is increasing all the time.

The second pronged approach is to see how we can eradicate this social illness. The root cause is the borrowing from illegal sources. I would like to urge the Ministry to consider this borrowing as an offence under the Act, as what out Member of Parliament, Mr Christopher de Souza, has said. This was earlier explained that this would bring the activities underground and the borrowers

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keep silent on the details of the borrowing, hence investigative work is hard. Presently the situation is that we already need to change the legislature many times to get more information and I do not see the difference it will make. However, before we do, please do provide legal sources for mini loans for would-be borrowers. Today, we have pawn shops and various easy cash or Easi-Credit schemes but they all require the borrowers to show that they have the ability to pay unlike the illegal money lenders. As the Government has combated the illegal 4-D by opening up legal 4-D betting shops, can the Government do the same by providing small loans to the people?

Personally, I would like to propose two possible sources where mini loans can be extended, one is for companies making small loans to employees and the other is for social clan associations to help these families in difficulty. Please allow me to elaborate. If companies are able to claim some tax incentives or reduce their risk of collection when small loans are made to employees in financial difficulty, the companies would be more willing to lend. For example, claim for tax incentives for a certain portion written off as staff expense upon non payment of the loans. The company has an interest in the staff welfare and the loan could easily be deducted from the employee's salary over a longer period of time. Secondly, most clan associations were set up to help each other when many of our forefathers came to this shore. The families are closely-knit and know each other well. If there are times of difficulties, they should be allowed to extend some credit to their members, as compared to now, where they are just social clubs. The Government could set a limit based on the funds that they have but allow them to provide some credit extending facilities to their members.

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Illegal moneylending is not a problem that exists only in Singapore but is common in Asian countries and even in the West. In the UK for example, an estimated 200,000 UK households are using illegal moneylenders. People in the UK repay 120 million pounds per year to illegal money lenders. I would add to Prof. Straughan's call for a profile of the borrowers here. But the victims are most likely female, aged 30 to 40, on benefits, living in social housing.

Illegal moneylending is concentrated in deprived communities in society. Only a minority, three out of 10, of borrowers have chaotic lifestyles – drug and alcohol abuse or gambling problems. The rest have exhausted legal credit options.

We should take a leaf from the UK experience and launch a Stop Loanshark Project. They have a website to offer debt advice and assistance for people who are in dire straits or who need counselling or assistance arising from harassment by these loansharks. They run training programmes for volunteers and for those who need help in money management. Retired police officers for example can volunteer their services and help to nail the culprits. There is also a Credit Action group which is a national money education charity established in 1994. Credit Action operates at a national level through advocacy, collaboration and partnerships with various groups and companies, with a particular emphasis on those most vulnerable to financial difficulties.

In Singapore, we should similarly set up a Stop the Loanshark movement. We can tap on the GRC websites to popularise its work and reach out to residents who can log in and report the culprits via e-mail or phone. The movement can be led by an experienced police investigator or any other civic leader, working with a pool of volunteers. We need to act fast, and act firmly to stem this scourge on our community. In

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addition, this movement could also look into how to make our children money-savvy so that they do not fall into debts.

Finally, before I end, I would like to appeal for our young offenders who have been lured by loansharks into harassment activities and also opening of bank accounts for the illegal moneylenders. In view of the increase activities, our Home Team have moved in fast and furious and as a result our young offenders have been caught without knowing the serious consequences of the law. I have seen three young persons’ appeals in my Meet-the-People Sessions. Two teenagers are involved in harassment activities and the third is involved in the opening of a bank account for the illegal activities. Their family backgrounds are the same, namely, parents suddenly out of job, business failure and one parent suffered from sudden illness. Their allowances are either limited or suddenly cut off. They recognised their parents’ difficulties and did not press their parents for their daily allowances. As a result, either innocently or stupidly they allowed themselves to be coaxed into illegal moneylending activities.

I would like to appeal to the Home Team to be sympathetic and compassionate to these young offenders and listen and understand the cause of their misdeeds. Allow them to have a chance to continue their education and impose on them the community service which I have advocated earlier on instead of imprisonment.

I have noted that the new section 28B applies to offences involving minors under 16 years of age. I am appealing for this to include the minors under 18 instead of 16. We have raised the age limit to 18 years for our young to take driving licence as we find that they are more responsible at age 18. We should raise the age limit to 18, so those who cause or procure any

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person below the age of 18 years to commit an offence to be severely punished.

( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Mdm Deputy Speaker, I am very glad that the Parliament will now legislate to deal with illegal moneylenders, who have been harassing others. I think we should learn from our experience of how we use the Criminal Law (Temporary Provision) Act to deal with the infamous Chap Ji Ki operators and cause their operations to collapse. At the moment, we can only nail down the shrimps and small fries. We have not heard of the big fish, maybe the "soon hock", or the red snapper being caught yet.

Mdm Deputy Speaker, with the freezing of unlicensed moneylender’s account, I think we should extend it to include the wealth of family members of the syndicate, so as to stop the transfer of their ill-gotten gains. I also think that law enforcers should be empowered to freeze the bank account of the suspected moneylenders and their family members directly. Of course, their family members can appeal to the Minister to withdraw some of the money from the frozen account.

I also noted that caning is only optional, and not mandatory. Why is it so? I think we should make it mandatory, because illegal moneylending is already an offence. It is a criminal offence. They have also caused hardship to a lot of families and instigated a lot of young people to do this sort of things. I think we should make this mandatory, and not just an optional punishment. In addition, will these offences be serious enough to warrant the assistance of Interpol to help us to track down some of the illegal moneylenders and their assets?

Nowadays, people can apply for credit loans or credit cards. However, before

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they are given the loan, they would be asked whether they have the means to pay. Illegal moneylenders do not require all these. As the Government has set up legal betting shops to fight illegal 4D, can the Government do the same by providing small loans to the people?

Mdm Deputy Speaker, I would like to propose that the Government work with the private and public sectors to extend mini-loans to the needy people. I think there are two ways we can do it: first, we would allow the companies to lend money to their employees; and secondly, we should allow the clan associations to extend loans to families who are in need. Please allow me to elaborate. If we could allow these companies to have some tax rebates to minimise the risk of bad debts, they would be more willing to provide small loans. In case this loan is not paid, it can be written off as staff expenses. The company can treat this as part of the staff welfare, and it could deduct the loans from the staff’s monthly salary. Secondly, the original purpose of setting up clan associations is to foster relationship among clansmen and help each other. Now they are just a social club. I think we should extend their functions by allowing them to provide loans to families who are in need. The Government can set a limit based on the size of their fund. They could then lend the money to the members who are in urgent need.

Finally, I would like to appeal for young offenders who have been lured recently by the loansharks into harassment activities and opening of bank accounts for the illegal moneylenders. In view of the increase in these activities, the Police have moved in very fast. As a result, many of the young offenders have been caught without knowing the serious consequences of the law. I have seen three young people in my Meet-the-People

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session. Two of them were involved in harassment activities and were arrested. The third was involved in the opening of a bank account for these illegal activities. The family backgrounds are more or less the same, namely, parents suddenly out of a job, business failure, or one parent falling sick suddenly. Their allowances were either limited or suddenly cut off. They recognised their parents' difficulties and did not press their parents for their daily allowances. As a result, either innocently or stupidly, they allowed themselves to be coaxed into illegal moneylending activities.

I would like to appeal on behalf of these young people. I hope that the Ministry of Home Affairs would be sympathetic and compassionate to these young offenders and understand the cause of their misdeeds. Please allow them to have a chance to continue their education and impose community service on them, rather than sending them to jail.

In addition, I noted that the new section 28(B) applies to offences involving minors under 16 years of age. I am appealing for this to be raised to the age of 18. We have raised the age limit to 18 years for our young to take driving test, as we find that they are more responsible at this age. We should raise the age limit to 18. Anyone who lures a person below the age of 18 to commit an offence should be severely punished.

Thank you, Mdm Deputy Speaker, for the opportunity to speak on this Bill.

*Cols. 2165-2168.

Mdm Deputy Speaker: A clarification, I believe.

Mr Christopher de Souza: Thank you, Mdm Deputy Speaker, it is very short. I thank Prof. Straughan for raising her point and I am very happy to have such a compassionate resident living in Ulu Pandan, and that is exactly what I think she is trying to build in – some

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compassion. Even if we were to make borrowing an offence, there would be some compassion in the manner in which the discretion is used as to who would be eventually prosecuted. That is the first point. And secondly, if you do make borrowing an offence and the borrower is a young offender, you always have the ability to request that he be put on probation. Then, he can understand the full effects of what he has done and part of his probation could be going and scrubbing off "owe-money-pay-money" signs along the corridors. So I think that couples compassion with rehabilitation which is absent if you do not have it as an offence. But I would like to underscore my strong support for the Bill. I am not advocating that we go for making borrowing an offence now. It is only if the measures do not bring the numbers down.

Mr Seah Kian Peng: Mdm Deputy Speaker, my points on this Bill are motivated by the simple idea that money should be put in the hands of people who have the best ideas for them. Laws regulating money, in so far as money is treated as capital and hence a factor of production, should be merely tools that facilitate the most efficient allocation of this capital.

There is nothing wrong or bad about moneylending. In fact, I know of one very distinguished person who shared with me that his mother raised the family up by resorting to borrowing monies from loansharks. Fortunately, she was able to service the interest regularly and ultimately repay the loan amount in full. He confided in me that at that point in time, this was her and their family’s only option. Unfortunately, such stories are few and far between and most people who had to resort to loansharks never get to see the light of day.

Mdm Deputy Speaker, I see the proposed amendments to the Moneylenders Bill as a re-balancing of the

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existing law, but I feel this balance can still be tilted towards the side of the lenders. Let me explain.

As we legislate for new measures and tougher penalties against loansharks and their associates – a move which I fully support – we need to, at the same time, review and propose measures which ensure that those in need know where they can turn to in their time of need. This issue, like most of the social problems we face now, has multiple dimensions to it. Someone describe it to me, it is like squeezing a balloon. As we turn off the tap and put the screws on the loansharks, we have to ensure that the licensed moneylenders become a known source which those in need of funds can turn to and borrow from.

Some Members are of the view that there is a need to even impose penalties and make borrowing from unlicensed moneylenders, the loansharks, illegal. I do not support such a view as this in itself is not a solution.

So first, I support the loosening of controls on marketing as well as the charging of interest rates. The original Moneylenders Act (MLA) of 1959, was intended to protect borrowers from falling into the trap of moneylenders who impose high interest rates. But there is a sense that high rates are fair play.

The new Moneylenders Bill will make it legal to charge interest above the current prescribed amounts of 18% for unsecured loans, and 12% for secured ones. I support this because it allows a better matching of risk and return. Whether or not this will assist in profiteering is something that we have to find out empirically, but given the current status of information flows and means of communication, I find it difficult to believe that profiteering can still take place.

Mdm Deputy Speaker, this new law will give licensed moneylenders more

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flexibility to act and to increase the supply of money. At the same time, there is an affected area of law that may need to be changed in tandem with this.

I speak of the credit co-operatives, a point on which Mr Sin Boon Ann has also elaborated. Whilst this does not come directly under the purview of the Ministry of Home Affairs, I would like the Minister to work with the appropriate Ministries to consider the promotion of credit cooperatives and some relaxation of rules that apply to them which may currently curtail their growth.

Co-operatives play a crucial role in this because they have a social mission, something that allows them to take on greater risks for comparatively lesser returns. For example, credit co-ops can serve the lower and lower middle income groups while the banks and finance companies can concentrate on the middle and the higher income earners. There may be some overlap but I think each will find its own space in time to come. In terms of marketing, co-ops will need to position themselves differently from moneylenders. And I believe they can do so – in the same way that many of the NTUC Social Enterprises, the various co-ops, they have differentiated themselves from commercial entities.

Mdm Deputy Speaker, I stress the social mission because I do recognise that some families do need to have access to credit in times of crisis, and we need to look for solutions for such cases. So perhaps we need to make it easier, whether it is in terms of form filling, or whether it is in terms of greater expediency in processing of applications. We should certainly also encourage people to join thrift and loan societies, inculcate in them the concept of regular savings, in whatever small amounts they can afford. By being members, they will also have

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access to loans when they need one because they are members. I would like to ask if the Minister can liberalise the existing restrictions to allow credit co-operatives to:

(a) advertise their services – the current guidelines do not quite permit them to advertise beyond the registered location. This, to me, does not seem to be very sensible because credit co-operatives cannot be location-based services. Members need to know that they can get help from their own co-ops and even if they are working in the same organisation, it is common for them to be spread over different locations; and

(b) allow for greater flexibility in membership criteria so that they can reach out to more people in the community.

Mdm Deputy Speaker, I recognise these proposals do not come under MHA's purview but I hope this can be taken up by the relevant Ministries, via the Whole of Government approach.

The proposed legislative changes are of no use, I emphasise again – no use if we do not provide alternative options for traditional clients of loansharks to turn to and credit co-ops have a useful role in this regard. We are not encouraging such behaviour as irresponsible spending, but really, if you need to dig yourself out of a hole, I think it is to use a more friendly hand than a grasping one.

Mdm Deputy Speaker, I do support the need to punish illegal moneylenders severely. Despite what I have said about the advantages of the free market, I recognise its limits. The difference between loansharking and licensed moneylending lies in the licence. And the licence pledges a person to a certain set of rules, and part of which includes the proper behaviour of collection. Many of us have seen many residents affected and

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traumatised by the collection tactics of debt collectors. I have my fair share of such residents who have been affected by these incidents. Their lives have been turned upside down. So I have no sympathy for such perpetrators and support the move for stiffer penalties. I want to propose some practical suggestions on the ground for the Minister to consider.

First, on the policing front, can we equip all NPCs (Neighbourhood Police Centres) with adequate CCTVs. This can be deployed immediately to affected victims as a form of monitoring. It is money well spent and should be made standard items in all NPCs.

Secondly, introduce incentive schemes for information relating to such activities and syndicates. It could be a one-off period as part of a clean-up exercise.

Third, publish the photos of known loansharks and their syndicates – and this can be displayed on all notice boards of all Residents Committees and HDB blocks. If the Senior Minister of State needs a pilot run to test the effectiveness, I volunteer my ward at Braddell Heights to try it.

Mdm Deputy Speaker, it needs a community effect to reduce loansharking. We need to recognise that there is a demand for credit from people who do not have good credit risks profiles; we need to match this demand to an honourable supply. I believe the new law is going towards that step. I ask to do it more and I would like to ask the Minister to consider the suggestions I have made.

With that, I support the Bill.

5.51 pm

Ms Ellen Lee (Sembawang): Mdm Deputy Speaker, it is timely that MHA is reviewing the law in this area taking into cognisance that harassment activities

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have almost doubled in the first half of 2009 as compared to the same period in 2008. I am pleased to note that the proposed amendments to the law intend to adopt a multi-prong strategy of targeting not just the runners but the loanshark syndicate bosses, and even borrowers to deal with the burgeoning illegal moneylending problem in Singapore. This is indeed timely and imperative considering that the two Integrated Resorts will be opening their doors soon.

As an MP, I always feel so helpless when I receive complaints from my constituents about harassment, vandalism and various forms of mischief, affecting innocent households, often with young children and elderly at home, who were not even borrowers or remotely related to the borrowers of these illegal moneylenders. I am, therefore, heartened that MHA is introducing tougher measures and stiffer penalties such as mandatory caning and incarceration even for first-time offenders to serve as deterrence to would be and repeat offenders.

In the same vein, it is heartening to see the harsher penalties have been given more teeth with wider investigative and enforcement powers vested in the law enforcement agencies and most notably, the introduction of extra-territorial jurisdiction against illegal moneylending offenders. MHA has also gone the extra mile to criminalise the acts that contribute to loanshark activities and tightening the change of residence regime. Borrowers may also now be brought to court if they give false addresses that lead to innocent people being harassed by loansharks and their runners.

When this Amendment Bill becomes law, I hope to see the augmented powers exercised judiciously. In particular, I look forward to see the law enforcement agencies taking proactive action against these offenders to bring the masterminds,

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the kingpins and the financiers behind these loanshark syndicates to answer for their illegal actions, and vindicate the humiliation, unnecessary sufferings and damages inflicted upon innocent households.

However, the problem of loansharking is that there is both the demand and supply side of it. Besides introducing new laws to arrest the problem it would be timely to also review the existing credit policies and offer acceptable and workable alternatives to cash-strapped individuals who genuinely need monies for unexpected exigencies. Such exigencies do not occur only in severe economic downturns or recessionary periods but also in good times when the economy is doing well as there will always be individuals inflicted with unforeseen but genuine needs. Often, these desperate individuals seek the services of loansharks simply because they are easily assessable and non-discriminatory, unlike banks or financial institutions which often make it difficult for people to borrow money with their endless checks and demands for collaterals. I would like to reiterate the idea of a microloan scheme which has been mooted in this House before by my colleagues and also today, a few speakers before me have also again called for this to be implemented. This is so that the genuinely desperate individuals can borrow at affordable interest rates.

Such a scheme is not impossible as I was pleasantly surprised to read an article contributed by one Miss Jane Yeo in the October-December 2009 edition of the Handicaps Welfare Association’s "Handicaps Digest" entitled "Micro-Finance Scheme: How I Benefited From This". Ms Yeo is apparently a person with disabilities and getting a small start-up, interest-free loan for a time limit of 10 months under the Association’s micro-finance assistance scheme has helped her

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to own and run her retail business successfully and she was also able to make a small profit. According to Ms Yeo, the flexibility of the scheme allows her to repay instalments of $500 or $1,000 and there was no penalty for late "submission", she used the word "submission", by which I think, she could mean "repayment". She also did not have to provide a guarantor nor must she have a minimum income to be eligible to apply for this loan.

This article shows that if the Handicaps Welfare Association could provide its members with disabilities to be self-reliant through micro-funding, there should be other institutions that should be able to do even better and in the process help to eradicate the huge problems caused by small loans.

In summary, I applaud the amendments and the resolute move by MHA to nip the illegal money-lending problem in the bud. The new amended laws alone will not be the dynamic panacea to this age-old problem. We should continue to explore ways to curb demand as well. Likewise, the law enforcement arm has an even greater role to leverage on the new ambit of powers and far-reaching jurisdiction to combat and minimise, if not, eradicate the proliferation of such illegal activities.

Allow me at this stage to provide a reply to what Prof. Paulin Straughan had said just now, when she said that the new measures appear to be just cutting tentacles from the kingpins and she questioned the effectiveness of such a measure. I believe that if Prof. Straughan were to be confronted with families who have been harassed by loansharks or she has been in an environment where she sees these notes and demand notices pasted and even paints splashed all over the house, I think she will understand why cutting off the tentacles bit by bit is better than trying to catch the kingpin at

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one go because when the resident calls out for help, we will not be in a position to tell them, "wait, let us educate them". What they demand for is actually immediate action, immediately, if not, yesterday. Therefore, I hope that MHA will, apart from cutting off the tentacles, also move further in to catch the kingpins that we want to net.

Assoc. Prof. Ho Peng Kee: Mdm Deputy Speaker, first, I want to thank MPs who have spoken out in strong support of the Bill. Loansharks monitor what the Police and authorities do. I think this point is made also by Mr Arthur Fong, when he alluded to the amendments in 1993 when Prof. Jayakumar also said that those who are criminals out there actually watch what we do.

So the emphatic message that we collectively send from this House today, that we will not tolerate loanshark or loansharking, I think that is very important. MPs have shared heart-rending accounts of how their residents have been hounded and harassed by merciless loansharks and their runners. Let me say that my heart and I am sure all our hearts go out to these people and also the assurance from us that they do not walk alone in their travails and that is why we are raising the ante today.

Now, we have taken some time to finalise this Bill as we have crafted its provisions very carefully. One key point which Members have spoken at some length on is the fact that we have not criminalised borrowing. Well, as I have said earlier in my speech, there are indeed pros and cons. And the debate in this House reflects this diversity of views. So let us take some time to assess the measures that we are introducing today and then we can, further down the road, assess if there is a need to take this measure. Now, as many MPs have highlighted, Ms Ellen Lee, Prof. Paulin Straughan, Ms Audrey Wong, Mdm

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Cynthia Phua, Mr Seah Kian Peng, Mr Arthur Fong, amongst others, there are borrowers out there who would have a genuine financial need and some of them turn to loansharks.

But I would say that compared to the number of gamblers who turned to loansharks, this is probably a considerably smaller number. There could be some. The key point is to reach out to these people and to let them know that there are avenues of help. Of course, we can argue whether more can be done. I think many suggestions have been raised in this House that more can be done. But the first point is to impress upon them that if they are in a genuine need, they should not be shy or diffident about approaching avenues of help. So part of the aim for this debate is also to reach out to these people and to let them know that they must also help themselves by letting their needs be known.

As I have said in my Second Reading speech, there are other viable and, more importantly, legal avenues of credit. For one, I have mentioned the scheme for licensed moneylenders that has been liberalised – I think Mr Seah Kian Peng has lauded that. Now they can operate from more locations and indeed, the contact details of all the licensed moneylenders and the pawnbrokers are set out in the website of the Insolvency and Public Trustee's Office (IPTO). Actually, the number of loans has also risen as a result of this liberalisation.

Another source of credit which MPs have highlighted – I think Mr Sin Boon Ann and Mr Seah Kian Peng – is credit co-operatives which some will know as Thrift and Loan Societies. In fact, Mr Seah Kian Peng is on the Council of the Singapore National Co-operative Federation. This movement is doing good work, helping out many Singaporeans but of course the restricting factor is that they must be members. I understand that there are about 39 of such credit co-operatives with about a quarter million of members.

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So it is a viable source of borrowing for its members.

Mr Seah has argued, in particular, that this source of funding should be further opened up, and I think he has suggested two or three ways. MCYS oversees credit co-operatives and its response is that the social role of credit co-operatives is to promote thrift among members and serve their mutual needs. It is best served when the members and the management of a co-operative share a close relationship. So there should be a nexus, in terms of whether we should have a wider criteria for membership and open up to more Singaporeans. But the very idea of a co-operative means that there is a shared relationship, some nexus, maybe employees of the same company, which then fosters confidence that the deposits are in safe hands because these co-operatives take fixed deposits as well as lend money. The response is that credit co-operatives should therefore come from clearly defined membership bases whose individuals share affiliations with one another. In addition, as credit co-operative membership is not open to the general public, it is not necessary for them to advertise in mass media. I believe the credit co-operatives have their own ways of reaching out to their members through various forms of publicity. So I say to Mr Seah, Mr Sin and others who argue for more to be done on this score, to take it up separately with MCYS and to convince the Minister that more can be done.

As for the clan associations, I do not think that there is anything to stop them from lending money to their members. I think lending by clan associations was Mdm Cynthia Phua's point. Many of them do not do that. Some of them do not have the resources. But if they want to do so, they can if it is within the ambit of their constitution, provided they get approval from the Registrar of Moneylenders. I

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think it can be done. As to companies lending to their employees, I think some companies do that as a matter of welfare for employees. Different companies have different policies. I think we should leave it to these companies to devise a policy that suits them best. Mdm Phua, in a very heartfelt manner, said that companies should be incentivised. Here, again, it is a matter of policy for MOF to consider. If she wants to take it up with MOF, I think that is something she can consider.

I welcome these suggestions because these show that Members are thinking as to how we can enhance the net of legitimate borrowing. I say this also in response to the Micro Loan Scheme that Ms Ellen Lee has suggested. In fact, it was raised in the House last year. MCYS at that time said there was no need to do that because there are other schemes in Singapore, by SPRING Singapore, POSB loan scheme and other avenues. Unlike other countries, I think in particular, less developed countries like Bangladesh, there is a clear example there; the Grameen Bank, in Singapore, these are other ways of raising small loans.

So educating Singaporeans on the options is a key point. And I am happy that there are organisations like Credit Counselling Singapore, I think we have heard of the organisation, it is doing good work. They reach out to borrowers to explore their options and indeed, even refer them to legitimate sources of credit and, in some cases, even help them work out debt repayment schemes. So, my call therefore in this House today is that people who need help, please do not turn to a loanshark because we all know that it may appear to be an easy way out. Your friends may encourage you, you may be enticed. But really, it is a slippery slope. Go to these agencies that we have talked about. If you are not clear, in fact, there are three touchpoints that they can press. First, Community Development Councils, those are very accessible on the ground.

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There are 36 Family Service Centres located all around Singapore and also all of us who run grassroots organisations will know that we are all ready to help. There is also a ComCare toll-free hotline 1800-222-0000. MCYS is keen, I think we all know that, to reach out to people who need help. So whether it is through the hotline or whether through calendars, or whether it is through banners and posters displayed at HDB void decks or displayed in CCs and schools, or indeed in MCYS and CDCs' websites, all these financial assistance schemes are publicised. MCYS informs me that it will continue to work closely with the CDCs and grassroots leaders to publicise these efforts.

Last year, about $50 million was dispensed through the ComCare scheme to needy Singaporeans. So, therefore, once again, there are community organisations, grassroots bodies and commercially driven bodies out there who can extend help. But the key point really, having said this, is that ultimately, it must be a matter of personal responsibility. I think this is a point that Ms Audrey Wong makes. The need for more education to let people know that, unless it is something that they cannot help themselves, in other words, a sudden unexpected bill that falls upon them like a medical bill or an accident where you have to pay a certain bill, if it is a matter of spending on their part or of incurring debt from buying things, there are signposts along the way where a person should know that he is reaching a danger point.

Here, I think in this House, several times already, the Minister for Finance has mentioned the MoneySENSE programme, which is a national programme helping Singaporeans understand more about financial planning and financial responsibility. I am glad to say that MoneySENSE is working with CDCs to run basic money management workshops for low-income

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families. Indeed, on its part, MOE has introduced financial literacy concepts into the school curriculum. This is more of a longer-term approach perhaps, but it is still something which is important because we all know that this loanshark problem will be with us for some time. All these building blocks are important even as we address the problems within a more immediate time frame.

On the issue of counselling of debtors, that is another point which Members have raised – I think Prof. Paulin Straughan, Ms Audrey Wong, Ms Irene Ng, Er Lee Bee Wah. The key message to desperate borrowers who had borrowed for whatever reasons and who feel that they are on sinking ground is that they need not despair. The message must be that there is a choice to become a runner to pay off their debt. I think we focus on this quite a bit. We know that there are runners out there who may feel that they have no choice or who may feel threatened by loansharks who may be so pressurised that everybody is standing against them that they think the best way or the only way to let off the steam is to succumb, but that is really the beginning of a bigger problem. So resist the pressure because there are avenues of help out there. I am very happy to say that a lot of these avenues are run by expert people on the ground – voluntary welfare organisations like One Hope Centre, I think Ms Irene Ng talked about it. In fact, I went to the 5th Anniversary of One Hope Centre just last month and they are doing good work among debtors. There is Tanjong Pagar Family Service Centre, there is a Care Corner Singapore. They are voluntary welfare organisations who are gearing up to do this, manned by volunteers who are prepared to help. They also run helplines, for example, Credit Counselling Singapore has a website www.ccs.org.sg and indeed debtors can call the number, 1800-2255277, to check out the services. I think this is the point that I want to

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respond to. I think Mr Sin made the point that it would be better if Government runs a dedicated helpline where people can turn to, manned by experts. I would offer the current alternative which is the many-helping-hands approach, tapping expertise which is out there already and working with them so that they can reach out to more people.

I think it was Assoc. Prof. Paulin Straughan who talked about mandating counselling by the Courts. In terms of Court punishment, it is really up to the Courts to decide. In the appropriate case, whether it is mandating counselling or as I think Ms Phua suggests, community service. It is really up to the Court to decide whether in the appropriate case, this is the thing to do. The message we have sent is that you should not be doing any harassment, even for youths because we know that loansharks out there are exploiting youths. The numbers have gone up almost three times last year, compared to the year before. The youths are an easy group to exploit but really, whether the paint is splashed by a 15-year-old or paint splashed by a 25-year-old, it is still being splashed. The frustration, the anxiety, the fear is still caused. So I think this is a message we want to very clearly send.

Having said this, educating the youths, I think, is also very important. This is a point that many of the MPs have made. That even though we are tough with youths, we must take a multi-pronged approach. This is what Ms Audrey Wong says. And let them know beforehand that they should not succumb to the temptation or to the thrill of becoming harassers. In other words, being sucked into vice. So whilst on its part, this Bill takes that step of deterring adults from exploiting youths, but this is a very focused approach, youths themselves must also be dealt with if they do wrong

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but at the same time helped so that they will not do wrong with proper advice and proper education.

I think Members have made very valuable suggestions, whether it is parental vigilance or education. I think Ms Lee talks about that. I think she has raised a Parliamentary Question on this and an answer has been given by MOE. More resources are being dedicated now to counselling youths on the pitfalls of, for example, gambling addiction. Those are very good points, and it is good that the House sees this issue especially with the coming of the IRs. The National Council on Problem Gambling (NCPG) is gearing up, that body is doing much more now, for example, like what Prof. Straughan says, to better understand the phenomenon of gambling, in particular amongst youths. In fact, last year, they organised a conference in August. A big conference where they brought people together – people who are experts in the field, and 300 participants attended, 150 of whom were from the schools. These are dedicated and very focused efforts and I think we can all support them. Police, on its part, works very closely with the schools. Police also reaches out to the youths. Police in fact has been more proactive now with its new media outreaches. It has got a YouTube video titled "Second Thoughts" warning youths of the dire consequences of such behaviour. Also, NCPG partnered the National Addictions Management Services to hold this conference that I talked about last year. So it is also drawing expertise from the ground. This National Addictions Management Services was formerly called CAMP, based in IMH. So that is what NCPG is doing.

And so the point, therefore, for youths is that whilst we punish them, yet at the same time we help them by steering them away from the slippery slope. A question has been asked by Ms Joscelin Yeo and also by Mdm Cynthia Phua whether we

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will consider raising the age of the under-16s, maybe to under-21. Mdm Phua suggested under-18. Well, let us look at how this provision works out first. This is a first cut. Yes, I agree that there are also those who are over 16 who are also being exploited. I will say – and I will say the same for many of the suggestions – that we will monitor and we will assess the need to toughen the law or to widen the net. So, currently, we will keep it at under-16. Also on this provision, Mr Heng Chee How asked if we are talking about someone who is 21 or above exploiting someone under-16, how about someone who is 19 years old? Are we not letting this guy get away with it? Well, I think the mischief behind this provision is not to let an adult exploit the youths. So, technically and legally, an adult is considered someone 21 years and above. In any case, wherever you draw the line, there will be somebody who is just below it. So taking the mischief into consideration, I think we will keep it at that. But do not forget – I think Ms Joscelin Yeo also makes that point – that somebody who is 19 years old who instigates someone under 16 to commit either harassment or to become a loanshark is actually liable for punishment. It is just that the new provision does not apply to him. But as an instigator, he would be punished anyway. So it is not a matter of him getting away scot-free but this provision not applying to him.

Let me make this point about borrowers who have become harassers. I think there have been some sympathy raised in this House for this group and for the need to distinguish this group of borrowers who become harassers for loansharks. First of all, what we have done in this Bill is to ensure that both groups are punished and I think rightly so both groups should be punished. And from what we have heard in this House, from what I said in my speech, there is, in fact, organised crime; there is layering. Everybody plays a part. They may play

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different parts but because they are working in concert the pain and problem is perpetuated.

The example we have used here is Hydra and the tentacles, and some Members said, very graphically, that "yes, we have to continue working by cutting off the tentacles, even as we try to attack the head". And indeed this Bill, like Mr Christopher de Souza aptly puts it, introduces new powers whilst we enhance the traditional punishment of jail and so forth. But really, the nub of this Bill is that we want to do more to attack the source, which is the kingpins. So, we have freezing provisions and provisions where there can be inspection of documents. And yet, at the same time, we have to address the ongoing problem on the ground so we have to cut off the tentacles. We have to ensure that the harassers do not perpetuate the ill intentions of the loansharks.

And this is what Ms Irene Ng also talks about when she asks "where is the Police?" In fact, Police is working very hard and I want to give her and this entire House the assurance that Police is in fact taking this seriously. As I have said in my speech, Police has geared up its resources, re-organised itself, working closely with the ground. But as I have also said in my speech, loansharking is not an offence that is easily solved unless you catch the person red-handed or he leads you to the kingpin, to the loanshark. Very often, they do not even know who the loanshark is and the numbers do not help because it is probably from a prepaid SIM card and the SIM card has been sold to either a borrower who has disappeared or sometimes even foreign workers who have disappeared. But the assurance I want to give is that Police is serious. And over the last six months, as I have said, because the community has matched the seriousness of the Police, not just in terms of the community on the ground, but also MPs like Mdm Phua, who has been

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leading from the front, and Mr de Souza who has pledged support for Ulu Pandan, and other MPs in this House also doing this, working together, we have make many more arrests.

So let us continue to do that – look at both groups and understand that they play different roles. Mr Cheng says in future he hopes more can be done to enhance the punishment of the loansharks. This is something we can consider in the future but I think the scope of punishment is sufficient for now. And this I also say in reply to Mr Arthur Fong and to Mr Heng Chee How and to others who have argued that there should be enhanced punishment for various offences. We have, like I said, drafted the provisions very carefully, calibrated, poised, quite balanced. Whether we need to do more, we will take a relook later as the provisions work out on the ground.

Mr Hri Kumar asked about the borrowers who provide correct information but subsequently change their place of residence. He said can we do more for this group or indeed even borrowers as a group who borrow and their neighbours are harassed. My experience is that the borrowers are often apologetic, they are sorry that this has happened, they will try to cooperate with the Police, with the neighbours to try and rectify the situation. Some, in fact, also help to rectify the damage by getting somebody to paint over the graffiti. Members also know that the Town Councils have been working on this so when there is such vandalism, they quickly get their act together to remove these signs which could possibly instill fear and anxiety. That is important. That is how victims recover, do not show that you are cowed and that is how as a community, everybody is chipping in. This is the point I really want to make – since the call here in August last year, as I showed from statistics, the number of

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harassment cases has come down. But as Members all know, there is no trend, we have to press on but people have rallied and I think more can be done. I say this is also in response to Mdm Cynthia Phua's point when she talks about the UK project "Stop the Loanshark Movement". Actually, in Singapore we already have a movement because everybody is chipping in. So let us just continue to do what we are doing with, hopefully, more projects, through the CSSP framework, for example, Citizens On Patrol, Neighbourhood Watch Groups, Stop the UML projects and schemes on the ground. All these are frameworks that can be used to fight loansharks. And I want to assure everybody that as they do their part on the ground, the NPCs will also give their full support.

On Mr Hri Kumar's point, therefore, on borrowers – this is something that we have not addressed. We all know that borrowers who have borrowed from loansharks, if they are still staying there, they will say, "Well, it is also something that I really do not want happen to my neighbours." But the loanshark's tactics have been to inflict pain on the neighbours as well. It is not something that the borrowers would have wanted. So that is one group. The other group of borrowers would be borrowers who have moved. They have borrowed and then they move. Now, even for those who have moved, some may not have changed their addresses or, worse, there is also a group who borrowed based on a false address or a previous address. So there are gradations to culpability on the part of borrowers. What we have done is to take a focused approach, punishing the most blatant of the borrowers and these are people who borrow based on false addresses or their previous addresses and, therefore, mislead the loansharks. As I have said, we take a calibrated approach. Now it is focused but this is not the one-for-all panacea; we will continue to see whether more can be done. In the

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meantime, one way of course is that if loansharks are caught and convicted in court, possibly a request for compensation can be made of the loansharks. We all know that under the CPC, a request for compensation can be made and if we can identify the homes, in particular, where these loansharks have been responsible for, perhaps that is a possibility.

Mr Hri Kumar has another suggestion on the use of a statutory declaration (SD). Can we make all HDB sellers declare that they are not indebted to a loanshark? Well, first of all, like I have said in my speech, actually less than 1% of HDB flats are attacked in such a manner. Even though all Members agree every flat attacked is one too many and our heart goes out for every flat attacked, to require a SD from all sellers would probably cause an inconvenience to a much larger majority of legitimate sellers who do not sell and move away knowing that they have outstanding loans from loansharks. So I think that is not necessary. Basically, these are two unrelated transactions – the sale transaction of HDB and the taking of a SD.

Mr Heng asked why we restrict ourselves to HDB's database. In terms of intelligence gathering, it is not so much to find out where the loansharks are. He probably knows that access to HDB's database is to find out, for example, where the borrower has moved to and, in particular, to enable ICA to have a better idea as to people out there who have shifted but have not registered their new address. Well, this is something we can look at because currently under police investigations, Police can already access, for example, the repository of addresses in the Singapore Land Authority's database. These are private addresses. It is very unlikely that a person who has sold an HDB flat who owes money would have moved to a private property. This only captures the owners. So whilst there is still a possibility of doing that, we will

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leave it as it is for now but because, as I have said, the vast majority of loanshark's problems take place in HDB flats, let us focus on that first. This is the basic approach. We have taken three to four months to draft this. Since I raised this problem in Parliament about three to four years ago, we have taken so many steps. So this is one more final package – calibrated, targeted approach. Then we continue to monitor and see if there is a need to do more.

Some Members have raised the issue of the upcoming Integrated Resorts and whether that will lead to more loansharking or indeed more criminal elements coming here. I think Ms Audrey Wong asked this. Let me first say that our tough laws which include the Criminal Law (Temporary Provisions) Act already deter many from coming here. I have explained this many times in Parliament over each five-year period to extend the CLTPA, the role of the CLTPA in deterring these criminals. Specifically, on the IR spillover effect on crime, to counter this possibility, we have since 2005 work assiduously. So MHA has set up the Casino Regulatory Authority (CRA) to oversee the conduct of the casino operators and their key employees. For example, under the Casino Control Act, the casino operator must take all appropriate steps to ensure that unlicensed moneylending or related activities is not conducted by its employees, patrons or any other persons inside the casino. Casino operators who contravene this requirement will be liable to disciplinary action, including a variation of the terms of the casino licence and a financial penalty, not exceeding $1 million.

And to handle casino-related crimes, police is setting up the Casino Crime Investigation branch within CID's Specialised Crime Division. Now, the CRA and police will work hand-in-hand to prevent crime within and around the

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casinos. In addition, the Commissioner of Police can impose statutory exclusion orders on criminals or suspected criminals to prohibit them from entering the casinos and using them as a place to perpetrate their illegal activities. Going forward, MHA will consider the need to introduce an Organised Crime Bill, which some countries have done, to tackle crime syndicates holistically. If we do that, we can then look at whether some of the provisions that we are introducing today should be incorporated.

On the other point that Ms Wong raised – the involvement of foreigners in unlicensed moneylending activities, either as loansharks or as borrowers – my response is

that police investigations have not uncovered any foreign loansharking syndicates operating here, although some elements of the business could be conducted overseas in neighbouring countries to evade police detection. In fact, this is one reason why we are having this new provision of having extra-territorial jurisdiction.

In response to Mdm Cynthia Phua, and as I said in my speech and I think Mr Sin has pointed that out, the SPF indeed has good cooperation with its neighbouring counterparts. That would be stepped up and, as and when necessary, Interpol's help can be brought in. But this excellent cooperation, in particular with our neighbouring countries built up over time – fighting various kinds of crimes – can be tapped effectively to fight loansharking. As to Ms Wong's other query on borrowers, the indication is that the vast majority of borrowers are Singaporeans. So it is not a problem that foreigners have created.

On mandatory punishment – I think this is the point that Mr Calvin Cheng has made – whether mandatory punishment will put a fetter on the Court's discretion

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in sentencing. Actually, mandatory punishment, for example, mandatory imprisonment, it means that the Court has to jail a person. But within that power, there is a range where the Court can jail a person either for "x" years or "x plus y" years. In that sense, the Court will still have some discretion, taking into account the mitigating circumstances of the case. That is his key point. Whether it removes the Court's ability to take into account mitigating circumstances, the answer will be no, because still the Court can consider that. Many MPs, in fact, have highlighted the fact that we have imposed minimum mandatory punishment. I think as this House knows, we do not do that lightly as a government. We do it when the situation warrants it. And that is why at this point in time when we have to send a strong message, we have included some mandatory minimum punishment in the Bill, I am sure the message will sink in.

One other point which I think Mr Calvin Cheng and Mdm Cynthia Phua want assurance on is that if the harm is perpetrated through a company set-up rather than individual loanshark, will just the company be punished? What about the perpetrators behind it? Will they hide behind the cloak of the company? The answer will be no because under the Moneylenders Act, when an offence is committed with the consent or connivance of an officer of the company, the officer is also guilty of the offence and is liable to the punishment as an individual. That stands to reason. Indeed, in an appropriate case, the corporate veil can also be lifted and proceedings initiated directly against the individual himself.

On the freezing framework, Mr Hri Kumar wants an assurance that it will be exercised judiciously. I think that will be the case, although Mdm Cynthia Phua takes the other position and says, "Why not let an ASP do the freezing?" I think

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let us keep the current position because it is a new approach insofar as moneylending is concerned. Under the Bill, safeguards have been built in because the Minister must be satisfied that there is reasonable cause to do this. The Minister can only issue a freezing order if he has reasonable cause to believe that the property or funds in the account are proceeds from the detained loanshark's loansharking activities. There are safeguards because anyone who is affected by the Order can apply to Court to get it lifted and, also, we have made provisions where someone who is affected, family members, for example, can ask the Minister to give a licence to deal with the money.

The other point that Mdm Phua makes is whether the loanshark can funnel his monies away and escape the long arms of the law. The answer is no, because the freezing order can also be used against his family members. But there is still the need for the Minister to be satisfied that there is reasonable cause to believe that these are proceeds arise from loansharking.

I think I have covered most of the points. As regards clarifications on new offences, Mr Heng suggests that those who knowingly arrange and/or provide any kind of logistical support, for example, materials such as pig heads, incendiary materials, should also come under the definition of "abetment". I assure him that the list of acts set out under the new section 28(1) which are deemed to be abetment of the harassment offence is not intended to be exhaustive. Arranging or providing for these logistical support can be considered as abetment, which includes intentionally aiding by an act – the commission of the offence. Basically, whether a particular act of assistance is caught will depend upon the actual facts and circumstances of the case.

Mr Seah Kian Peng made quite useful suggestions for more to be done on the

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ground. Let me assure him that insofar as use of CCTVs is concerned, yes, more are being deployed because it may have a deterrent effect. Police also has acquired more sets and this would be deployed on the ground as necessary. As to whether there is a need to paste the photos of known loansharks or syndicates on the notice boards, I think the current approach really is that the call for information is, in fact, more dispersed – through TV, the printed press, and in cases where publicity is required, it is not of the loansharks. It is of people who are caught on CCTV – these are your possible harassers. In that sense, I think it is better to disperse it because the guy may not be just living in that block. He is probably from all over the place. Actually when Police started doing this about three years ago, there have been some good results where arising from these publicity outreaches, information that has been rendered has led to arrests.

As to whether we should have money rewards – Mr Seah talks about whether there can be some incentive for information to be given – I would say that that is not Police practice. We have not gone on this approach, that this is the path that some other countries have taken where they offer money for information. What we have done in Singapore is where, outside of loansharking, generally, four out of 10 crimes are solved with the public input, and that is wonderful, the public give input without expectation of a financial reward. That should be encouraged and this, in fact, is happening for loansharking too. As many Members have said, people are banding together. Let us continue to do that.

In response to Mr Sin's point about whether more should be done in terms of using the powers – I think he talks about the need to track movements in terms of understanding the flow of funds – actually the new section 30(A) empowers the

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Public Prosecutor to authorise the Police to inspect documents containing information of suspected loansharks as well as the spouses, sons, daughters, trustees and agents. So using this power, Police can, when they are investigating a case, track the accounts and fund movements. And when they do this, they will glean insights into the syndicate's network and the identity of its members. This provision, of course, will exist alongside current existing provisions under, for example, the STRO (Suspicious Transaction Reporting Office), where I think Mr Sin, as a lawyer, will know that financial institutions are obligated to report a suspicious transaction. So I think this combination of provisions is good enough because we also need to maintain a balance, not to over-reach in this tracking.

I think I have covered most of the points. It is a long session. I thank Members for their many useful suggestions. I have not said yes to all these suggestions because we are at a point when we are assessing and seeing whether more can be done. But certainly we will continue to track the number of cases and our progress. And if there is a need to tighten up, I will look at some of the suggestions that have been raised. Ten MPs from the PAP and four NMPs have spoken, giving very valuable inputs. It is quite unfortunate that none of the Opposition MPs has spoken. But, in any case, what MPs have spoken about today have contributed to making Singapore safe and secure, because it is spoken from the heart. In fact, particularly elected MPs, they have really reflected the anguish of their residents. I think that is laudable and, hopefully, with everybody working together, we can reduce this scourge.

Mr Low Thia Khiang (Hougang): Mdm Deputy Speaker, I want to clarify that the fact is that no Opposition MP has

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opposed the Bill, although we have not spoken. We are not opposing the Bill.

Assoc. Prof. Ho Peng Kee: Okay, so you support the Bill.

Mr Sin Boon Ann: I want to thank the Senior Minister of State for a very comprehensive response to our comments. But I was hoping that he would respond to the points that were made earlier about criminalising borrowing and the point about using the instrument of prosecution's discretion in deciding whether or not to prosecute a particular case as a way to mitigate the concerns about borrowers who come from different backgrounds of needs. By making this borrowing a criminal offence, you are sending a very strong message out there and you will certainly deter people who even think about borrowing and doing business with loansharks.

Assoc. Prof. Ho Peng Kee: Since we dropped the penny about two-and-a-half years ago, we have been thinking through this issue and monitoring all the feedback. And because it is a complex issue, we have not taken a decision as of now. Some of the points have been raised in this House. I do not think now is the time to fully debate this but the key points have been raised. So let us continue to reflect on this and, more importantly, look at the outcome of all the measures we introduced today. If they have the desired effect, then we may not need to criminalise borrowing, at least in the foreseeable future.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Assoc. Prof. Ho Peng Kee].

Bill considered in Committee.

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Assoc. Prof. Ho Peng Kee:

The Chairman: The citation year "2009" will be changed to "2010", as indicated in the Order Paper Supplement.

Clauses 1 to 14 inclusive ordered to stand part of the Bill.

Bill reported without amendment; read a Third time and passed.