Singapore, Singapore – In a recent study by fintech firm Lendela, it has been revealed that platform workers in Singapore, encompassing delivery riders and private-hire drivers, are gradually improving their debt management skills. Notably, debt consolidation, which once led the reasons for borrowing among these workers, has dropped by 15 percent over the past two years.
Despite these improvements in financial handling, the persistent rise in living expenses continues to challenge these individuals, shifting the borrowing trend towards covering daily living costs. According to Lendela’s findings, more than a third of delivery riders and approximately 34.1% of private-hire drivers have transitioned from consolidating debt to seeking loans predominantly for handling ongoing living expenses.
This shift accentuates a critical concern regarding the financial stability of platform workers, particularly as recurring household bills and essential expenses become the main triggers for seeking financial aid. Bryan Tay, Singapore Country Manager for Lendela, addressed the issue, stating that while there is a noticeable improvement in handling existing debts, the necessity for loans related to everyday expenses points to a broader economic pressure that needs continuous observation and adaptation.
The demographic analysis within the report presents an even more pressing situation among older platform workers. There has been a staggering 147 percent increase in loan applications from workers aged 60 and above, indicating that financial distress is more pronounced among the elderly in this workforce sector. Simultaneously, individuals in their 50s have seen an 86 percent rise in loan applications.
In stark contrast, the younger demographic, specifically those under 30, have shown a 42 percent decline in their loan applications, suggesting a shift in financial dependence and perhaps a different approach to managing financial burdens among the younger citizens.
Tay further explained that the prevalent reasons for borrowing resonate strongly with the need to manage basic living costs. From bills to household expenses and even education, a significant portion of platform workers find themselves compelled to borrow in order to meet their routine financial obligations.
Additionally, there is a noted uptick in the size of loans being taken out, with more workers opting for larger sums ranging between $10,000 and $20,000. This trend reflects the escalating scale of financial aid required to meet basic needs amidst tightening credit assessments by financial institutions.
Such financial dynamics underscore the necessity for lending solutions that offer flexible repayment terms to accommodate the varying financial realities of borrowers in today’s economy.
As the landscape of platform employment continues to expand, the economic challenges faced by these workers suggest an urgent need for policies and support systems that address the financial vulnerabilities exposed by the rising cost of living and the evolving nature of contingent employment.
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