The quote is taken from the news report ‘Interest rate spread on decline’ in the Bangladeshi newspaper Financial Express, dated 20 July 2020. “BB” refers to Bangladesh Bank.

Many articles on this website describe the very common situation where migrant workers have to pay large sums to secure their jobs in Singapore. Bangladeshi men are particularly vulnerable to such demands and tend to pay the most.

Some months ago, a worker (let’s call him Mostafijur) shared with us a statement from the bank that loaned him one million Bangladeshi taka (approx $16,250)  to fund his “agent fee” for a job in Singapore around the third quarter of 2018. The Rupali Bank statement covers the first ten months of 2019 and shows his repayments and interest charges.

Scrutinising it, Debbie Fordyce of TWC2 remarked, “I can’t make sense of it. He pays and pays and yet the outstanding amount remains nearly the same. It hardly budges.”

The copy of the statement from Rupali Bank. The details are too small to be seen here, so we’ve provided a clearer table of the same details below.

From the details shown below and what we know of the Mostafijur’s job history, the key points are these:

  • The loan amount was one million taka or approximately $16,250. It was taken out in the third quarter of 2018 to pay the “agent”, and Mostafijur came to Singapore to start on a job in November 2018.
  • While the statement reflects only transactions between January and October 2019, it indicates that prior repayments totalling 137,600 taka (≈ $2,236) had been made in 2018. Of this amount in repayments, about 24 percent went to servicing interest.
  • Through the first ten months of 2019, Mostafijur (or his family) made seven more repayments, each time amounting to 34,500 taka (≈ $561)
  • Every quarter, the bank applies an interest charge of about 3.2 percent on the outstanding amount. Annualised, this implies an interest rate of 13.4 percent a year.
  • In the first ten months of 2019, Mostafijur (or his family) repaid about 241,300 taka (≈ $3,921) to the bank, managing to reduce the outstanding amount by 157,576 taka (≈ $2,560). In other words, about 35 percent of what they paid to the bank went to servicing interest.

Mostafijur’s average monthly salary was $895, inclusive of overtime wages. To set aside $560 each month to repay the bank would mean only $335 left to support himself and his family. Someone other than him or his family is thus the main beneficiary of his labours. Despite the relatively stiff interest rate, that someone isn’t the bank — it is the person or persons who arranged the job for Mostafijur and who caused him to go to the bank to take out a million-taka loan.

At this rate of repayment — managing to reduce the outstanding loan amount by $2,560 over ten months — it will take Mostafijur perhaps five years to work off the loan.

But there is no guarantee that the job will last five years. Work Permits issued by the Singapore government have a duration of just two years. Although they can be renewed, this is entirely at the discretion of the employer. If it is not renewed, there is no way to claim any portion back from the recruiter or “agent” since the fee was an illicit transaction. And if the worker were then to look for another job, he would have to raise money again to pay another recruiter, compounding his indebtedness.

Such is the gamble that workers like Mostafijur are compelled to take when they look for work in Singapore.

In Mostafijur’s case, it ended even more badly than that. He didn’t complete the first year of his Work Permit. He was injured at work, lost his job and remained unemployed for eighteen subsequent months before being repatriated.

The picture above is of a mere piece of paper issued by a bank. The human toll it represents, however, is indescribable.