Amid financial stress of pandemic, Hong Kong NGO helping domestic workers manage debt will receive funding from Operation Santa Claus
- Hong Kong’s domestic helpers are often targeted by unscrupulous lenders, and can find themselves trapped in cycles of debt
- Enrich HK is planning a programme to help them spot predatory lending terms – and avoid loans in the first place
The NGO Enrich HK reported a 24 per cent increase in the number of people seeking financial counselling in the first nine months of 2020, compared with the same period last year.
“At the moment, there are a lot of domestic helpers who are sending home a larger remittance because their family members can’t work during the pandemic lockdown,” said the group’s communications manager, Zamira Monteiro, adding that sources of debt for domestic helpers could be complicated and manifold.
“It often starts at recruitment – most domestic workers need to take a loan just to be able to pay for recruitment fees, and so by the time they get here, they might be at least HK$15,000 [US$1,935] in debt.”
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There is also immediate pressure to support multiple family members back home, while some workers fall victim to scams, want to help out a friend or run into emergencies, among other unexpected expenses.
“The financial pressures can be massive for this particular community,” Monteiro said. “And what ends up happening is, because of low levels of financial literacy, they are vulnerable to continuous situations of debt.”
Meanwhile, some loan agencies specifically target the group with less favourable arrangements.
“There are money lenders who will provide terms to domestic helpers that they wouldn’t provide to Hong Kong residents,” Monteiro noted. “They provide it knowing that this particular community needs the money.”
Some helpers, she added, often agreed to certain terms unaware of their rights or local regulations – for instance, not knowing the legal interest rate.
According to Hong Kong law, an interest rate above 60 per cent per annum is illegal, while the government considers anything exceeding 48 per cent a year to be extortionate.
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Enrich HK is currently planning to run a “Debt-Free Helper” project specifically tailored to help foreign domestic workers manage their debt. The programme will offer group workshops and one-on-one consultations, with the goal of teaching helpers how to spot unfair loan terms – and how to avoid needing loans in the first place.
Most importantly, Monteiro said, the programme would be conducted in English, Tagalog and Bahasa Indonesia, “which covers at least 97 per cent of the domestic worker population”.
Enrich HK started in 2007, and delivers financial and empowerment education for Hong Kong’s migrant domestic helper community.
OSC is a fundraising initiative jointly run by the South China Morning Post and public broadcaster RTHK since 1988.
You can make donations to Operation Santa Claus here
