Conversation with Credit Counselling Singapore (CCS) Honorary Advisor, Mr Kuo How Nam

The editorial team had a pleasant chat with Credit Counselling Singapore (CCS) Honorary Advisor, Mr Kuo How Nam, who played a pivotal role in establishing CCS. He was the first founding member, who later served as its president, and subsequently, as director.

Having stepped back from an active role on CCS Board of Directors, we asked him what his typical day was like.

“I get up and exercise. I'm a news junkie. So, I read all the news... (and) read a lot of books. I'm kind of still thinking about writing a book about behavioural economics, which is something that is very interesting to me.”

Behavioural economics is a field of study that looks at how people make decisions about money and other things. The field tries to understand why we sometimes do things that seem a bit strange when it comes to money, using psychology and real-world observations. For example, why a person is willing to spend on something that they don't really need or why they may procrastinate when it comes to saving for the future.

Mr Kuo continued, “if you apply this to our debtors, then that’s very interesting. We have seen that our clients, who are ostensibly educated,  but they behave in a way that gets them into all kinds of problems with debt.”

To find out more about what motivated Mr Kuo to start CCS, we would have to take a trip back in time to the early 2000s.

Planting the Seed

“After the dot-com bubble burst and the 2003 SAR (Severe Acute Respiratory Syndrome) (outbreak),  there was the big economic downturn. A lot of companies and people got into trouble; debts were (going) into default and the Courts being inundated with collection cases.”

Here’s a lesser-known fact: Mr Kuo does know a thing or two about internet companies. After he retired from banking in 2000, he started a company which published content online on topics such as retirees and retirement planning.

“When I started out, the internet was fantastic… But unfortunately, the internet bust happened in early 2002 or 2003.”

“So, in the end (the company) ran out of money and we closed the company down. In a way, I didn't have the expertise in running an (online) publishing company.”

Meanwhile, following the economic downturn, the Courts at that time felt that they have “become (a) debt collection agency for the banks, who are issuing all the summons.”

The late Richard Magnus (1946 to 2022), who was then a Senior District Judge, mooted the idea of having credit counselling as a form of intervention.

Countries such as England, Canada, and the United States, already had credit counselling agencies that help distressed borrowers regain control of their finances without resorting to legal action. These non-profit organisations serve as intermediaries between borrowers and their creditors, helping individuals work out repayment plans and guiding them towards regaining financial stability.

The seed for credit counselling was thus planted in Singapore.

Becoming the Voice for the Helpless

Mr Kuo revealed that when he first sat down with Ms Tan Huey Min (now the General Manager of CCS), he asked “How to start? We had no bank representative(s). We don’t know what to talk to the banks.”

Fortunately, a champion was found in one Mrs Ong-Ang Ai Boon, Director of The Association of Banks in Singapore (ABS).

In her autobiography “It’s Not Me: 40 Years as Director of The Association of Banks in Singapore”, Mrs Ong wrote “Singapore needed a credit counselling scheme… those in debt did not have a voice for themselves. They needed people to ‘open their mouths’ to speak up for them.”

That voice was Mr Kuo.

Mrs Ong wrote,  “I also called up Mr Kuo How Nam, a retired banker who used to specialise in consumer banking at DBS and then OUB, to join a meeting with the several judges.”

Mr Kuo recounted, “the meeting had the judges, Ministry of Finance people, Singapore Pools people… (and) after the meeting, we formed a committee.”

Mr Kuo continued, “we tried out with our first few cases. We only had one table and two chairs (in a small room provided by Singapore Pools). (Help-seekers) had to fill up the questionnaire which will give you all these information. I had to design the form. I drafted the various agreements that have to be signed.”

Paving the Middle Ground

At that time, it was common for one borrower to be indebted to five to seven creditors. It was a rocky start with individual creditors standing their ground when reviewing repayment proposals put up by a small team of volunteers, including Mr Kuo and Ms Tan.

Mr Kuo elaborated, “it was really a free-for-all. Some banks would say ‘yes’, some would say ‘no’. Some banks would disagree. Some of them had to report their head office. Some of them have their own credit policy. When the other banks find out you want more, they also want more and then the whole thing (the proposed repayment arrangement) collapses.”

“We spent the initial years sorting this thing out and were living from day to day,” concluded Mr Kuo.

The middle ground was eventually paved when ABS formally adopted CCS Debt Management Programme (DMP), an agreed set of guidelines and a fee arrangement.

With the initial grant contributed by ABS and a formalised fee arrangement in place, CCS “could actually start to do planning, as the finances were now stable. You could actually start to think of what to do and how to improve things rather than living from day to day.”

Fostering Financial Resilience

Fast forward some two decades later, CCS continues to be recognised as a leading charity that fosters financial resilience and a trusted organisation for all matter related to debt.

We asked Mr Kuo if he could share one advice on managing money.

He thinks for a while. Then looking directly at this co-author (who is the youngest member of CCS Outreach, Education and Research team), he said, “You look at a person who just starting out his first job… First, he gets a job, then he gets married, then he buys a home and have children. At each stage, the question of debt is very interesting because when a couple gets married, the couple will need to borrow for his home or car.”

Mr Kuo continued, “It is inevitable. Borrowing money is not a bad thing. If you don’t borrow money, you will never be able to save enough money to buy a home or car. But borrowing money makes it possible to enjoy the thing now and pay it off with future income.”

However, Mr Kuo also qualified, “so long as the repayments are planned, you can cope so long as you got a steady job...and have six months of emergency savings.”

“You need to ask yourself, if something happens to me, what will happen to my family? You need protection so that if something should happen to you, then your family will not be thrown out and forced to live in a rental flat. So, you need to have life insurance.”

To put it concisely into three things, it is to

    > Borrow within one’s capacity to repay.

    > Have an emergency fund of six months of expenses.

    > Have adequate life insurance.

Parting Words

Before concluding the interview, Mr Kuo revealed that he has macular degeneration - “my eye injection is expensive. The first injection was about $300; tried for three times it didn’t work” – he was candid to share his view of a visionary.

“In every organisation, you only need a few visionaries. But the visionary cannot stand by themselves. At the end of the day, he/she has to depend on people to bring this thing about. (Not all people) may have the vision but he/she needs to encourage and persuade people to get things done.”

~ Mr Kuo How Nam, Honorary Advisor; President from 2004 to 2016; Chairman from 2016 to 2020.

With this clarity of vision, CCS enters our third decade of service. Our mission remains steadfast: to help those distressed by the burden of problem debts and to foster financial resilience for all.

Credit Counselling Singapore. 

Published 25 February 2024