This was published in the South China Morning Post on July 31, 2012.
Foreign domestic workers arrive in Hong Kong hoping that if they work hard and save their money they can return home with enough savings to build a better life. But the truth is that, after years of working in the city, many workers return home with less money than when they first arrived.
Nearly 60 per cent of domestic workers in Hong Kong are in debt, according to surveys of 2,000 women conducted by the charity Enrich from 2008 to 2012.
It’s a problem rooted partly in cultures of unusually deep friendships and kinship ties, where requests for help are almost impossible to refuse.
“Family and friends are really important to these women,” Enrich director Lenlen Mesina said. “A lot of them co-sign their friends’ loans as a show of friendship, or take out multiple loans to send money home when their salaries can’t cover their families’ requests.”
To ease the problem, Enrich offers workshops on financial literacy to migrant workers of all ages and backgrounds, in community centres and churches around the city.
“We help the women understand that they need to take care of themselves, too,” Mesina said. She thinks the workshops, by addressing the root causes of workers’ financial problems, can help reverse the trend towards widespread debt.
At the latest Enrich workshop on Sunday, the mood seemed cathartic for many domestic workers who spoke candidly about their financial troubles. When asked for a show of hands – “How many of you have co-signed for a friend and been stuck with the loan?” – one-third raised their hands.
Jessie Pasnittan, 53, stood up and said: “It took me three years to pay back my friend’s loan of HK$50,000. After that, I stopped co-signing other people’s loans!”
Others said they had run up as much as HK$120,000 in debt, mostly from abusing credit cards, taking on friends’ debts or borrowing money from banks, loan companies or loan sharks.
“It is a very common problem that can also impact employers’ lives quite badly,” said Andreas Rosboch, an employer of a domestic worker and the author of Hiring and Managing Domestic Help.
“When workers can’t pay back the loans, loan sharks start coming to their employers’ homes and calling at all hours. Employers often have no choice but to let the helper go, but that doesn’t mean the harassment will stop,” Rosboch said.
Joseph Chan Ho-lim, district councillor for Central and Western, said: “My constituents have often complained to me that their helpers use their home addresses and landlines in loan applications.
“Many creditors strategically go after employers because they know employers might pay off their helpers’ debts just to stop the nuisance.”
Employers can complain to police, but they have told Chan that police can’t do much to help them since there is no law that prohibits creditors from targeting employers.
The Philippine consulate in Hong Kong offers mediation services in only a few debt-related cases, according to vice-consul Joy Banagodos. “We’ve been supportive of private groups in Hong Kong which advocate for greater financial literacy,” Banagodos said.
Founded in 2007, Enrich is a private charity run by volunteers, including many development workers and finance professionals who have emigrated from countries such as the Philippines, Singapore and Thailand.
Enrich’s highly interactive workshops help participants calculate their financial situation, create a budget and savings plan, and learn how to get out of debt. Their advanced workshops are aimed at women who want to start small businesses.
The minimum monthly salary for domestic workers is HK$3,740 a month. That is below the minimum wage in Hong Kong, but still a large amount compared to average salaries in many of the workers’ home countries.
“We have to support our entire extended families as a result,” said Fe Gallego, 55, a domestic worker whose salary as a teacher in the Philippines was only 1,800 pesos (HK$322) a month.
“We don’t know how to say no to children who ask for money, and we just give and give, more than we can make.”
But some workers spend too much on personal luxuries as well, said domestic worker Rosa Ocampo, 62. “They go to discos, go shopping, have picnics, eat at expensive restaurants. There are a lot of temptations in Hong Kong.”
Unexpected expenses and family emergencies can also push workers into debt.
Juvy Aguirre, 39, spent all her savings on her husband’s cancer treatment and funeral in the Philippines two years ago, and had to pull her daughters out of school. After taking an Enrich workshop last month, Aguirre is better equipped to plan for her family’s future.
“Enrich taught me how to balance my budget and not send all my money away. I’m going back home next year; I will put my daughters back in school and start my own fish-exporting business,” she said.