Forming about a fifth of Singapore’s 1.2 million-strong foreign workforce, migrant workers are an integral building block of Singapore’s economic development. However, they face many economic and social issues in the course of their work, many of which could be resolved with better financial literacy.

Initiatives from the government and social organizations have gone a commendable way towards improving financial literacy and protecting the basic rights of migrant workers in Singapore. A few examples include the Ministry of Manpower (MOM)’s stipulation that migrant worker employers must provide minimum medical insurance coverage for migrant workers, as well as programs that provide financial literacy and health support from NGO’s such as AIDHA,  SG Accident Help Centre, ItsRainingRaincoats, HealthServe, and others.

But long-lasting, large-scale change requires collaboration from all parties. Players in the wider ecosystem can do more to support these efforts, which will help prevent the exploitation of migrant workers and improve their lives. Equality is our shared responsibility, and financial literacy is the first step.

How a lack of financial literacy affects migrant workers

While the MOM has placed a fee cap on what Singaporean employment agencies can charge to bring in migrant workers, agents still often take advantage of low financial literacy among migrant workers to trick them into paying higher recruitment fees. It was recently reported that a migrant worker had to pay a S$12,000 ($8,800) recruitment fee to an agent–an unjust sum that requires an average of 35 months of work in Singapore to pay off.

Healthcare is also a major financial concern. Migrant workers run a higher risk of illness and injury due to their work, but being excluded from the country’s Universal Health Care (UHC) system means they must foot all medical bills. To save costs, some only seek medical care and bring medicines from home, but the pandemic makes this arrangement unfeasible. While health insurance would provide some protection, migrant workers often do not understand them and the plans are generally unaffordable or inaccessible for them, discouraging takeup rates and leaving them exposed to both health and financial risks.

Many migrant workers receive their salaries in cash and are unbanked–some 50,000 did not have a bank account as of 2020. This excludes them from many basic financial services and products, as well as leaving their earnings vulnerable to theft or disaster. They cannot earn interest on their wages and must rely on physical remittance counters to send money home–which is inconvenient given numerous COVID-19 lockdowns and movement restrictions.

What ecosystem players can do

Following outbreaks of COVID-19 in migrant worker dormitories in Singapore, a review of healthcare insurance coverage for migrant workers has been ongoing as part of an overall reassessment of their healthcare needs. To cater to this underserved demographic, private insurance providers are launching insurance plans specifically for migrant workers, which also makes them a valuable ally in educating migrant workers on the financial benefits of having better health coverage.

NTUC Income and Liberty Insurance were among some of the earliest to offer these specialized health insurance products for migrant workers in the country, covering everything from injuries and disabilities to critical illnesses. Some insurance providers also include financial coverage; for instance, Hong Leong Assurance Singapore (HLAS) partnered with eRemit to launch a health insurance plan that also provided salary protector insurance – a first of its kind in the country.

Many migrant workers struggle with the language barrier when trying to understand new services or features, especially for smartphone apps that are predominantly in English. Companies can provide dedicated support services, such as hotlines or helpdesks, that can help migrant workers translate important information. This is crucial when it comes to issues involving finance, such as employment or housing contracts – migrant workers need to be fully aware of what they are agreeing to.

Education can also help overcome these barriers. Social enterprises like SDI Academy empower migrant workers through affordable education in subjects such as English, computer literacy, and financial planning. Companies and organizations can choose to work with these social enterprises and ensure that their migrant workers are fully equipped with the tools they need to prevent exploitation–financial or otherwise.

Inspiring change through collective effort

Much of our economy and society is built on the backs of migrant workers. They are equally valuable members of our community and deserve to be treated fairly. The first step to addressing economic and social inequality is to help them improve financial literacy, which will enable them to make more informed choices and open up access to essential financial services. However, fostering meaningful change in this space requires a concerted effort from all parties.

We cannot call ourselves a modern and advanced society if we ignore the needs of our fellows and/or perpetuate inequality through inaction. Collectively, we have the capacity to engender holistic change by understanding the issues of migrant workers and creating solutions that level the financial playing field for them and ensure adequate coverage and protection. If we are truly committed to building a better world, this is the least we can do.

Srihari Sikhakollu is the Chief Executive Officer of eRemit Singapore, a digital remittance service platform backed by  Merchantrade Asia Sdn Bhd and QALA Tech Pte Ltd.

A proven business leader and people manager with an entrepreneurial mindset, Srihari has over 20 years of experience in the banking, financial, and FinTech industries. He is responsible for overseeing the strategic direction and everyday management of eRemit Singapore, as well as client and partner management across the 13 countries it supports.

Srihari is an advisor for Invoid, a next generation digital identity solutions company; Thrifti, a digital payments FinTech startup; and GoCashless Digital Payments in Singapore. He is also a member of the Global Impact FinTech Forum (GIFT) and sits on the Innovation Grant Evaluation Panel at the Institute of Innovation and Entrepreneurship, Singapore Management University, and a member of Asia CEO community.

Srihari is a devoted father of three and is passionate about spending time in nature. Walking and cycling are his main hobbies.

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10 Financial literacy solutions receive grants and support from PhilDev’s Financial Literacy Innovation Challenge

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