Empowering Low-Income Families to Overcome Debt

Overwhelming debt can negatively affect both finances and overall well-being.

For low-income Singaporeans, the burden of debt impacts more than just their finances. Research shows overwhelming debt can lead to substantial psychological and cognitive impairments, limiting an individual’s ability to make sound decisions and plan for the future.

At Credit Counselling Singapore, we believe that effectively managing debt is a critical first step toward achieving financial stability. However, families burdened by debt often need more than just financial assistance — they need comprehensive support and resources to regain control of their finances and build a more secure financial future.

Credit Counselling Singapore wants to empower low-income families to overcome debt by enhancing their financial capability and providing debt relief, helping them improve their financial well-being and build a more secure financial future.

The Financial Capability Building Support (FCBS) Programme with Debt Relief is a 24-month pilot programme developed and administered by CCS, in partnership with Quantedge Foundation (QF). The pilot will run from September 2024 to August 2025 and followed by a 12-month monitoring period. The programme comprises the following key components:

1.   Credit Counselling (2 x one-to-one sessions): CCS Financial Coaches (FCs) will help participants gain a clear understanding of their financial situation and draw up a realistic debt repayment plan, supported by debt relief, to address multiple creditors.

2.   Financial Coaching (10 x one-to-one sessions): Our coaches will guide and support participants in building financial capability, setting financial goals, track spending, managing cash flow effectively, and adopting positive behaviours.

3.   Financial Literacy Workshop (2 x group sessions): CCS Facilitators will lead peer learning sessions to enhance participants' knowledge of essential money management skills, such as budgeting, spending wisely, saving, establishing emergency funds, and understanding credit and loans, as well as identifying ways to increase income.

4.   Debt Relief: CCS will provide debt relief in the form of direct payments to creditors on behalf of participants, helping to ease their debt burden. This will allow families the opportunity to focus on securing their long-term financial future. The debt relief will be administered as follows:

a.   Participants, with guidance from CCS FCs, will establish a debt repayment plan. Supported by debt relief payments, the plan aims to reduce both the overall debt and the number of creditors, where practicable.

b.   CCS FCs will monitor participants’ progress and provide encouragement. Debt relief will be granted to participants who make consistent efforts to repay creditors. For each month they make a repayment, CCS will make corresponding payments directly to their creditors.

We will be studying the impact of a structured financial coaching programme combined with a novel debt relief support - marking a shift from programmes that focused solely on debt relief. Participants will be monitored and followed up with for an additional 12 months after the programme to track progress and outcomes.

What sets this programme apart is its comprehensive approach to addressing the debt challenges faced by low-income Singaporeans. By integrating financial coaching, the FCBS pilot not only equips participants with financial knowledge but also instils the confidence and practical skills needed to take control of their financial well-being.

While traditional debt relief programmes typically address institutional or secured debts, the FCBS pilot extends the support further to include debts owed to licensed moneylenders and personal creditors, such as family and friends.

This comprehensive and innovative approach recognises the complex debt situations many low-income families face, offering meaningful and sustainable relief.

If you're interested in exploring sponsorship opportunities or donating items such as in-kind vouchers or incentives as part of your Corporate Social Responsibility, please reach out to us at donation@ccs.org.sg.

If you're keen to find out more about the Financial Capability Building Support Programme (FCBS) with debt relief pilot, you may reach out to our Programme Administration Unit at PAU@ccs.org.sg.