RETAILERS AND NON-REGULATED ENTITIES (Offer of deferred credit terms and unsecured credit to consumers)

Column No : 1993

RETAILERS AND NON-REGULATED ENTITIES:

(Offer of deferred credit terms and unsecured credit to consumers): 18.

Assoc. Prof. Ong Soh Khim asked the Minister for Trade and Industry whether there are policies and regulations to restrict (i) retailers and non-regulated entities from offering deferred credit terms and unsecured credit to consumers, especially the lower income group; and (ii) non-MAS regulated institutions from offering relatively higher credit facilities to those in the lower income group.

Mr Lim Hng Kiang: Mr Speaker, Sir, retailers who offer goods to consumers on deferred credit terms or hire-purchase are governed by the Hire-Purchase Act. The Act requires such retailers to provide material information for consumers to make informed choices. These minimally should include the effective interest rate, method of calculating balance upon early settlement and administrative charges. The Hire-Purchase Act does not restrict who the retailers can offer deferred credit or hire-purchase to. It is left to the retailers to exercise their own commercial judgement on the credit-worthiness of their customers.

Similarly, the Moneylenders Act does not dictate the loan quantum that can be extended to borrowers. Commercial lenders will have to make their own risk assessment of their clients.

Assoc. Prof. Ong Soh Khim: Sir, is there a regulation for these retailers and non-regulated entities to check the credit reports of these applicants before issuing this facility to them?

Mr Lim Hng Kiang: Mr Speaker, Sir, as I mentioned in my answer, it is left to the retailers to exercise their own procedure and to make their own commercial judgement on the credit-worthiness of their customers.