If the behaviour is violent or potentially a threat to you or your helper, report the loan shark/collecting agent to the Hong Kong Police (999) immediately.

As an employer, you are not legally liable to pay your domestic workers’ loans (unless you have signed as a guarantor), but you may face harassment or threats from collecting agents/loan sharks, particularly via phone calls. The Investor and Financial Education Council clarify that debt collection companies cannot attempt to recover debts from any one other than the debtor or guarantor, and they also cannot employ methods to humiliate/harass the debtor, guarantor, family members or any one else to recover debts.

Know that terminating your helper should not be the first option and it won’t necessarily stop the loan sharks contact you. Working together to resolve the issue can actually result in a better relationship with your helper.

If loan sharks are harassing you or your helper make sure your helper gets assistance as soon as possible. Encourage her not to procrastinate and to address the issue in a constructive way. Suggest meeting Enrich for a confidential one-to-one financial counselling session. We provide impartial advice and will help her evaluate her finances and come up with a plan to move forward. 

Besides calling 999 for potentially violent or threatening behaviour, if you feel the loan shark or money lender is harassing you and your helper, you can also make complaints to the following institutions:

• +852 2827 8281 for The Licensed Money Lenders Association (if the lender is licensed with them)

• +852 2860 3574 for the Hong Kong Police, Money Lenders Licensing Section

• 18222 for the Hong Kong Police Anti-Deception Coordination Centre if you are concerned that this is a scam (e.g. a loans scam) 

Debt can understandably be stressful, for your helper and yourself as well. After all, a financially secure employee is certainly happy and focused in her work. It is important to understand that some level of debt is to be expected; for example, there is no point telling your helper that she is never allowed to take out a loan if she already has one. Also, many of us need a loan at some point - for example, if you’re purchasing a house or have a medical emergency.  

There are some things that you can do to understand the situation and ensure your helper is supported:

• Sit down with your helper to discuss the reasons for her financial hardship and possible solutions in a calm and non-intimidating manner. 

• Offer her the option of financial education with Enrich, so that she can learn to plan ahead and avoid needing to take unnecessary loans in future. If she has taken out multiple loans, then this is a clear sign that she needs support in managing her finances. 

• Make sure she gets professional advice - suggest meeting Enrich for a confidential one-to-one financial counselling session. We provide impartial advice and will help her evaluate her finances and come up with a plan to move forward. 

• If the situation has escalated and she needs legal advice, she can contact Help for Domestic Workers, Mission for Migrant Workers or the Duty Lawyer Service for free legal support.

Note: if you learn about your helper’s loan through a call or letter from a loan shark, it is important to stay calm and understand the circumstances. It doesn’t necessarily mean that your helper has intentionally hidden this loan from you, and there could be broader context (e.g. she has signed as a guarantor for a friend’s loan). Often helpers are afraid to discuss their financial situations with their employers in case they are terminated, or they don’t know if they should bring it up. Helpers and even their families back home can be victims of harassment from loan sharks. However, terminating her should not be the first option, and working together to resolve the issue can result in a better relationship with your helper.

There is no legal method or database to allow you to find out how many loans your helper may have. It is understandable that you might be stressed if you suspect your helper is in debt to a loan shark, but the best thing to do is sit down with her to discuss the situation and possible solutions in a calm and non-intimidating manner. Tell her your concerns and ask her what the issues are, why she might be in debt. She might be facing certain financial pressures or struggles that you are unaware of. 

It is possible that she might not feel comfortable opening up to you about her finances - after all, many of us don’t discuss our finances with our manager at work. Make sure she gets professional advice - you can suggest meeting Enrich for a confidential one-to-one financial counselling session. We provide impartial advice and will help her evaluate her finances and come up with possible solutions.

Your helper does not need to use your personal documents or signature to secure a loan. Documents typically required are copies of her employment contract (typically for proof of address - remember, this is her legal address that she can provide in Hong Kong), as well as copies of her visa and passport. She will usually be asked to list references and guarantors as well (usually other domestic workers). The loan will not be in the name of her employer and you have no legal obligation of paying it (unless you agree to sign as a guarantor, of course). She will also be asked for the landline number of her legal address, though the loan company would typically not call on this number unless she defaults on a payment.

If you are concerned that your helper might have loans, you can make sure she gets professional advice. Sponsor her to attend a confidential one-to-one financial counselling appointment with us to evaluate her finances and come up with possible solutions.

It is important to understand that some level of debt is to be expected; for example, there is no point telling your helper that she is never allowed to take out a loan if she already has one. Also, many of us need a loan at some point - for example, if you’re purchasing a house or have a medical emergency. 

To start with, try to hire your helper either directly or through an ethical employment agency to avoid her having to pay high recruitment fees. You can also help her set up a bank account and encourage her to save. 

Speak to your helper in a calm, non-judgemental way about borrowing money. If she does need a loan in the future, let her know she can speak to you first, if you are open to this. We do not advise signing a loan as a guarantor, but you can either choose to lend her the money yourself or help her ensure that the loan company is licensed and that the terms are fair. Caution her against signing a friend’s loan as a guarantor as that can leave her liable.

If your helper already has a loan, remind her of her obligations to pay and encourage her to speak to you first if she is struggling with her existing loan or if she intends to take a new one.

It is also important to set a good example by paying her salary on time, providing her with payslips and paying her by bank transfer if possible.  

Prevention is better than cure! Sponsor your helper to attend our financial and empowerment education programmes so she can learn how to stay in control of her finances and plan for her future. 

The first thing to know is that employers are not legally liable to pay their domestic workers’ loans (unless they have signed as a guarantor). However, if you do start receiving calls or letters from a loan company, have a calm and open conversation with your helper right away to avoid the situation from escalating. Make sure she gets professional advice; you can refer her to us for a confidential one-to-one financial counselling session to assess her finances and identify possible solutions.

Here’s what can happen if a domestic helper misses a payment on her loan:

• She can first be contacted by the loan company or collecting agents as reminders to settle the payment. Letters might be addressed to the employer’s address (even if she has only missed one payment) - but remember, this is her legal address that she can provide in Hong Kong. Also, most loan companies require the landline number of her legal address for loan applications, but they would usually not call on this number unless she defaults on a payment. 

Note: Receiving letters or calls about a missed payment are not immediately a cause for alarm and can often be resolved fairly easily.

• If she misses multiple payments, she might be vulnerable to more aggressive tactics from the loan company or collecting agents who might falsely threaten her with jail or threaten to inform her employers. 

Note: This can be quite a stressful prospect for your helper as she could fear losing her job and source of livelihood. Encourage her to have open conversations with you about any financial worries which she feels might impact her work and refer her to Enrich for a confidential, individual financial appointment. 

• The loan reference and guarantor (usually also domestic workers) might be contacted too if payments are missed. Many domestic workers who sign as guarantors (sometimes without understanding what this means), are often left to pay the remainder of the loan if the borrower defaults or disappears. 

Note: It’s possible that your helper might be chased for a loan for which is a guarantor, rather than the principle borrower. Many helpers sign as guarantors without understanding the legal ramifications of this.

• Collecting agents might also write demand letters and send it to domestic workers’ address in their home countries, threatening family members at home too. These tactics can be very intimidating and many domestic workers may not know how to communicate with their employers about this.

• If multiple payments have been missed, the loan company/collecting agent may contact the employer. In such a case, you can insist that they speak mainly to the borrower (your helper) and that you are not involved. If you are being harassed by a loan company/collecting agent, remember that terminating your helper should not be the first option, and working together to resolve the issue can result in a better working relationship. 

Note: If you are contacted by a loan company, loan shark or collecting agent whose behaviour is violent or potentially a threat to you or your helper, report them to the Hong Kong Police (999).

Currently, there is technically no legal minimum or cap on the amount that an individual can borrow from a licensed money lender (as of April, 2019). Usually, the maximum amount that can be borrowed, as well as the loan repayment schedule, are calculated by the loan company based on the domestic worker’s salary and the length of her visa. Of course, it is up to the domestic worker to negotiate and decide if she agrees to sign the contract. 

Many loan companies will also provide tempting offers to domestic workers who they know need the money or who have borrowed before. For example, they might call up those with existing loans and offer them the chance to renew their loan or to borrow a higher sum, increasing the overall amount owed.

If they have an existing loan with a money lender or if they’re not eligible to borrow for some reason, some domestic workers might turn to unlicensed money lenders or individuals to borrow money. As these are illegal and unregulated, domestic workers can borrow small or large amounts and might also be subject to illegal and unethical lending practices, such as high late fee charges, passport retention or extremely high interest rates (e.g. 20% per month) which can rapidly increase the overall amount owed and spiral out of control.

Often, the debt cycle starts with recruitment. For newcomers, upon arrival in Hong Kong they may already need to take out loans due to very high fees charged during the recruitment process (training, placement fees, etc.). With no access to formal credit (bank loans) in Hong Kong, domestic workers may resort to (licensed or unlicensed) money lenders. Sometimes, an employment agency may bring them to a loan company as soon as they get here to sign a loan contract to cover recruitment fees. 

Money lenders do not provide the same services as banks - they give out loans only and usually charge higher interest rates than banks. Most licensed money lenders offer loans not just to domestic workers but to residents too. However, they often specifically target domestic workers since they are usually more in need of instant cash. 

The loan companies usually make it very simple for domestic workers to get a loan - which of course makes it even more tempting if you are in desperate need of money. Documents typically required are a copy of their employment contract, a copy of their visa and copy of their passport. They are usually asked to list references and guarantors as well (usually other domestic workers). If the borrower cannot settle the monthly payment, loan agencies will call and follow up with the references and guarantors. Guarantors can end up paying for the remaining repayments due because the principal borrower has failed to fulfill their obligation - many often sign as a guarantor without understanding what it means.

Settling the monthly repayment can be very simple - either through the bank, at the loan company office or even at any 7/11 (like you would pay for a utility bill).

Often, domestic workers sign high interest loans because they have no choice, or maybe because they don’t know whether the interest rate is actually high/legal or not. According to the Money Lenders Ordinance, borrowers can legally be charged up to 48% of annual interest on a loan by licensed money lenders. If it can be proven that they are a high risk borrower, they can be charged up to 60% of annual interest.

Some domestic workers might ‘share’ a loan with a friend, with one person agreeing to be the principal borrower, creating an informal repayment agreement between the friends. This is of course not an arrangement that we encourage domestic workers to pursue. 

If they have an existing loan with a money lender or if they’re not eligible to borrow for some reason, some domestic workers might turn to unlicensed money lenders or individuals to borrow money. In these instances, they can often be charged extremely high monthly interest rates (e.g. 20% per month) and might even be asked to provide their passports as collateral (which is illegal). 

If you are concerned about your helper’s financial well-being, make sure she gets professional advice. You can sponsor her to attend our financial and empowerment education programmes.

The following cannot be taken as security for a loan:

• HKID card;

• passport;

• national ID card;

• bank savings or account book; or

• photographs of you, your guarantor or your family.

It is illegal for anybody except the domestic worker or the relevant authorities to keep her passport, whether as collateral for a loan or otherwise. Note that most licensed money lenders will not retain original passports (though they might ask for a passport copy). Rather, it is often unlicensed money lenders or individual lenders who will retain domestic workers’ passports. 

If your helper has given any of these items as security/collateral, encourage your helper to call and ask the money lender for them back immediately. If your helper prefers and if you are comfortable, you could call the money lender yourself (to ensure they take it seriously). If they refuse, contact the Hong Kong Police (999) and your helper’s consulate as soon as possible.

Theoretically, migrant domestic workers can invest in Hong Kong - however, this might be quite challenging in practice. Only 18% of domestic workers here have bank accounts, and many might not be able to maintain the substantial minimum balances or requirements needed in order to access investment opportunities through their bank (such as a securities account to invest in stocks).

There might be other investment opportunities that exist such as multi-level marketing or pyramid schemes which target domestic workers, but we always advise caution as some of these might be scams, or might require domestic workers to invest large amounts/purchase stock.

Many domestic workers actually prefer to invest in their home countries, as part of their future plans for themselves and their families. For example, they might use their time in Hong Kong to buy land at home, build a house, set up a business or invest in their family member’s education.

Regardless of where they invest, we always encourage our participants to first develop a good and sustainable savings habit to be able to invest enough funds. We always stress that savings have to be the main priority and that they should never invest more than they can afford to lose. When they are ready to invest, they should then begin by doing research, understanding their risk appetite, and so on. 

If your helper is interested in learning more about how to invest safely, you could sponsor her to attend our Growing My Money workshop which provides a comprehensive introduction to investment tools.