Unlicensed loans, family responsibilities, and financial obligations leave worker uncertain about her future.
For one foreign domestic worker in Singapore, an attempt to resolve a financial dispute became the beginning of a widening debt cycle. Years later, multiple loans and family expenses have left her questioning whether she can continue working in the country.
Savings Pool Dispute Starts Debt Cycle
Michelle, a 40-year-old Filipino domestic worker, said her financial troubles began in December 2023 after she organized a paluwagan, a rotating savings arrangement involving 10 relatives and friends. When two participants failed to contribute, the person due to receive the pooled money accused Michelle of taking it. Seeking to cover the shortage and clear her name, Michelle borrowed money from an unlicensed lender.
High Interest Makes Repayment Difficult
Michelle said the borrowing terms quickly became difficult to manage. According to her account, borrowing S$200 could involve S$100 in monthly interest, with additional fees charged when full repayment was delayed. After she missed a payment, the lender contacted her employer, who subsequently filed a police report but allowed Michelle to continue working.
Guaranteeing Friend’s Loan Adds More Debt
Her obligations increased the following year when she agreed to guarantee a friend’s loan. After the friend was deported for borrowing from illegal lenders, Michelle said she was left responsible for more than S$1,000. She also reported owing money to two jewelry stores in Singapore and another moneylender in the Philippines.
Family Medical Costs Push Borrowing Further
Michelle supports her parents and nine-year-old son in the Philippines, while her husband works in Saudi Arabia and contributes occasionally. When her mother became ill in February 2026, Michelle borrowed S$1,000 from her employer for medical expenses and later turned to two additional unlicensed lenders. By June, she said one lender had appeared at her employer’s home demanding repayment.
Contract Renewal Creates New Uncertainty
Michelle said she has repeatedly taken on new obligations before earlier debts were fully repaid. Her current employer has kept her employed, but her contract is due for renewal in 2027, and she worries it may not be renewed. She also said her borrowing history prevents her from transferring to another employer. Exhausted by her financial difficulties, Michelle said she may choose to return to the Philippines.
Michelle’s experience illustrates how financial obligations can accumulate rapidly when high-cost borrowing, family responsibilities, and guarantees for other people overlap. For Singaporeans, the case highlights financial risks affecting some foreign domestic workers living and working in the country. For Indonesians, many of whom also travel to Singapore for employment, the story offers a relevant example of the dangers associated with unlicensed lending and difficult-to-manage debt.
Sources: Straits Times (2026) , Yahoo! News Singapore (2026)
Keywords: Singapore Domestic Worker Debt, Foreign Domestic Worker, Unlicensed Moneylenders, Filipino Workers Singapore, Migrant Worker Debt, Loan Sharks Singapore
