MAS enforces new credit cap

Financial institutions can refuse individuals with debts amounting to six times their monthly income.

The Monetary Authority of Singapore (MAS) announced a new measure to help borrowers limit "excessive" unsecured debts.

According to an announcement, the Credit Limit Management Measure will cap the additional unsecured credit that a financial institution (FI) may extend to a borrower whose outstanding unsecured debts exceed six times his monthly income.

The measure will roll out on 1 January 2018.

FIs will not be allowed to increase the credit limit and grant new unsecured credit facilities to individuals whose unsecured debts exceed their monthly income six times.

Borrowers can continue to draw on their existing unutilised unsecured credit facilities. The new measure will not require borrowers to reduce the credit limit of their existing credit facilities.

MAS said the measure aims to pre-emptively cap borrowers' total credit limit before they are affected by the industry-wide borrowing limit.

"The vast majority of unsecured borrowers are borrowing within prudent limits," MAS said.

Since the introduction of the industry-wide borrowing limit in June 2015, the number of highly indebted borrowers – those with outstanding unsecured debts exceeding their annual income – has come down by about 21,000, from 5% to below 4% of total unsecured borrowers.

However, since January 2017, an average of about 4,000 borrowers per month have increased their unsecured debts to above 12 times their monthly income compared to the previous month.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia