Singapore to improve credit co-operatives' financial prudence, governance, management

THE Singapore government is proposing new policies to enhance credit co-operatives' (credit co-ops) financial prudence, governance, and management capabilities, with changes targeted for full implementation by 2018.

Credit co-ops are membership-based entities which provide thrift and loan services to their members. Currently, there are 27 registered credit co-ops in Singapore.

Following a Ministry of Culture, Community and Youth review of the existing rules governing credit co-ops, the government is proposing changes in three broad areas: raising prudential standards and promoting compliance; improving governance standards; and enhancing regulatory powers to deal with distressed and errant credit co-ops.

Said MCCY in a statement on Monday: "Credit co-ops serve a useful social role in encouraging savings and providing loans at reasonable interest rates to their members. However, to be effective in serving this role, they must be financially sound and professionally run. Given the deposit-taking function and growing membership, it is necessary to subject these co-ops to appropriate regulatory oversight so as to protect members' interests."

To that end, the government has launched a public consultation exercise to seek views from credit co-ops, co-op members, and the public from Monday until Feb 2.

The consultation paper is available at http://www.mccy.gov.sg/coopconsult or http://www.reach.gov.sg. Interested parties can send their feedback and suggestions via hardcopy or e-mail to mccy_regcoop@mccy.gov.sg.