THE Monetary Authority of Singapore (MAS) estimates that about 3 per cent of unsecured-credit borrowers have accumulated unsecured debts exceeding their annual income, said Deputy Prime Minister Tharman Shanmugaratnam, who is also Finance minister and chairman of the Monetary Authority of Singapore.
Speaking at a Credit Counselling Singapore (CCS) event on Tuesday, he said close to 65 per cent of these individuals earn incomes above the median, and more than half have tertiary-education qualifications.
The common reason for falling into debt problem is over-spending, said Mr Tharman. "The temptation to splurge occurs across all income groups."
CCS president Kuo How Nam said on Tuesday that the average outstanding debt under the organisation's restructuring programme is S$84,000 per debtor.
The average disposable income of such distressed debtors is about S$3,000, which means their debt is about 28 months of their disposable income. From CCS' data, these debtors typically owe money to an average of seven banks and financing firms.
"Such people have been able to build up such huge debts simply by borrowing more and more from banks," he said.