- Michelle, a Filipino worker in Singapore, fell into debt after a disputed paluwagan savings pool led her to borrow from unlicensed moneylenders.
- High interest, loan guarantees, jewellery instalments and her mother’s illness pushed her debt higher, with lenders even contacting her employer.
- She fears her contract may not be renewed and says she may return home because she is “very tired” and cannot see a way out.
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Michelle, 40, supports her parents and nine-year-old son, who live in the Philippines. Her husband works in Saudi Arabia and contributes occasionally, but she bears most of the costs.
“I pay my son’s school fees, his allowance, everything... transportation, the food.”
Her debt troubles began in December 2023, after she organised a paluwagan, a rotating savings pool common in Filipino communities. Ten relatives and friends contributed each month, taking turns to collect the full pot. Michelle collected the money and passed it to the member whose turn it was.
When two members failed to pay, the person due to receive the pot accused Michelle of pocketing the money and shamed her on social media.
“I asked her to wait because they had not paid yet, but she did not believe me, so she posted that I scammed her.”
Desperate to clear her name, Michelle borrowed from an unlicensed moneylender to cover the shortfall.
When she missed a repayment, the lender called her employer. Confronted, Michelle admitted she had borrowed from a loan shark. Her employer filed a police report but kept her on, giving her a second chance.
The borrowing terms quickly made repayment difficult, Michelle says.
“If you borrow $200, the interest is $100 per month. If you cannot return it with the capital, you pay a deferment fee.”
The following year, she agreed to guarantee a friend’s loan, a practice she says is common in close-knit migrant communities. When the friend was deported for borrowing from illegal lenders, Michelle says she was left to repay more than $1,000.
She also owes two jewellery shops in Singapore and a moneylender in the Philippines.
At a shop in Paya Lebar, she bought 7.2g of gold on instalments. By her tally, she has paid about $3,000 so far. Yet when she pawned the piece, it fetched just $1,000. She continues to pay the shop $100 a month and says she has another three years of repayments.
In February this year, her mother fell ill. Michelle borrowed $1,000 from her employer for her medical bills, then turned to two more unlicensed lenders: a Filipina working with a local man, and a Singaporean man in his 70s.
By June, one had appeared at her employer’s doorstep demanding payment.
Each new obligation pushed her further into debt before she could clear what she already owed.
“Before I could pay it off in full, I had to go deeper and deeper. It’s hard for me,” says Michelle, adding that her parents do not know the full extent of her debts.
Her employer has kept her on, but Michelle worries about what comes next. She says her borrowing history prevents her from transferring to another employer, and her contract is due for renewal in 2027.
“I don’t know if they will renew me,” she says. “I might choose to go home first, because I am very tired.”