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    Oct 06, 2015

    S'pore consumers owe $288.4m unsecured debt

    SINGAPORE consumers' outstanding unsecured debt continued to rise in the first half of this year, though the latest figures show that their debt exposure may be stabilising, according to a report from Credit Bureau Singapore (CBS) released yesterday.

    In June, the number of consumers who missed two or more months of payments on their credit cards, overdrafts or personal loans rose 10 per cent to 85,352 compared with the same period a year ago. This also represents a 32 per cent jump from the corresponding number of debtors in 2011.

    These debtors make up 5 per cent of the total population of unsecured credit customers.

    In tandem, their overdue balances rose to $288.4 million, a 7 per cent rise from a year ago and a 74 per cent jump from 2011.

    Over the last four years, unsecured debt exposure has also increased, with average balance per consumer for unsecured credit cards and overdrafts rising 16 per cent to $7,971 from 2011 to 2015.

    However, debt exposure appeared to be stabilising in June, when average balance per consumer for unsecured credit cards and overdrafts fell slightly to $7,971 from last year's $8,018.

    However, the average principal sum for unsecured personal loans rose 5 per cent to $13,584.

    Said William Lim, CBS' executive director: "While consumers' outstanding debt remains high, we note that average debt exposure for credit cards and overdrafts is stabilising. This may indicate that the measures put in place by both the regulator and banks to help borrowers pay down their debt are beginning to have an effect on the market. CBS will continue to monitor this trend."

    In June, the Monetary Authority of Singapore's new rules for credit card and unsecured credit kicked in, to help individuals who have already accumulated high levels of debt through credit cards and unsecured credit avoid accumulating further debt. They also help individuals who have difficulties repaying their existing debts avoid getting into further debt.

    To help these borrowers, the Association of Banks in Singapore (ABS) introduced in April a centralised repayment solution known as the Repayment Assistance Scheme to help borrowers reduce their unsecured debt over time.

    CBS also introduced the enhanced credit report in December last year that displays consumers' aggregate outstanding balances across financial institutions.