When I first started working in the mid 1980s, I was already fully exposed to the British banking system. I came back from England loaded with credit card debts and assumed that with my new salary as a newly appointed officer in the Brunei Government, I should be able to pay back the debts easily. I did pay it back but it wasn't as easily as I had imagined it to be. Because of that experience, for the first few years, I didn't open a new bank account or credit card account in Brunei, preferring to use the same bank account that my parents had kindly open for me when I was younger - even using some of the money that was already in there. After being in debt, I thought there and then, I am not going to apply for a credit card in Brunei, no siree, no...
It wasn't until I applied for a Yaohan card (anyone remember Yaohan used to be in Brunei? What do you mean you don't know what a Yaohan is?) that I was forced to apply for a credit card with my bank, the red and white hexagon logo - H***. And I was told that before I could apply for a credit card, I was required to have a current account. I didn't know that. In those days, credit cards and current accounts are not something people in Brunei used much. To open a current account in those days is not very easy. I cannot just go to the counter and ask the counter staff that I want to open a current account. I have to bring an introductory letter from someone who already has a current account there and the bank will check to see whether you should be given one. It was a very difficult process. In a way it was good, all these are self controlling methods and if you don't want to go through them, means you really won't be able to build up any debts.
Fast forward to today. You can go to any bank's counter and open any account that you want. You can apply for any credit card of your choice. Every bank has one or even two or three different ones. It's up to you. So much so, that practically everyone has a personal loan, mortgage, hire purchase and credit card debts. The total loan in the country is some $5 billion. It became a headline after I gave a speech about it last year. That is roughly the equivalent of about every single household in Brunei owing $100,000 and that I tell you is a lot of money. It is very worrying. For example, a lot of us assumed that an interest rate of 6% per annum for a car costing $20,000 is not much. It's only $120 a month. But $120 a month for 7 years just for servicing the interest payment means your $20,000 will cost you $28,400 which is 42% more than the original value of the car.
When MOF restricted the amount of undefined personal loan (you can still go for education, mortgage loan, or any other type of loan etc without the same restriction), a number of people complained saying that it is their business if they want to go crazy on loans as long as they are willing to pay the moon for it. It is their personal thing. At the end of the day, I have to say that it is not a 'personal thing' - as experiences have shown that in most cases, debts spiral out of control especially when you spend a lot of the money in servicing the debt rather than lowering the amount of principal that you borrowed. Families have been known to break up because of financial difficulties. Children unable to continue their education. People go into drugs tyring to escape from their problems. Crimes rise. So it is not a 'personal thing' anymore once personal debt problems become social problems. And social problems have costs - affecting the development of the country. However the restrictions imposed by our MOF are still very lax and still insufficient compared to the ones in our neighbouring countries. That to me should be reexamined again and see whether not going into a more strict personal debt regime might cost us dearly in the future.