The Singapore National Co-operative Federation (SNCF) brought together more than 70 representatives from the country’s co-operative credit sector last month to discuss trends in the financial sector.
The inaugural Credit Sector Forum was opened by SNCF’s first deputy chair, Yeo Chun Fing, who said in his speech: “Time and again, co-operatives have shown resilience and responded positively to the needs of our members.”
He congratulated several credit co-operatives who are set to celebrate their 100th anniversary in the coming years. “Having gone through WWII and countless other challenges, including Covid-19, this is quite telling of the strength and resilience of the credit sector,” he added. “It is this sign of resilience that benefited communities.”
The event also featured a discussion on the benefits and risks associated with ‘Buy Now Pay Later’ financial services, which have seen an increase in usage since the pandemic.
Arvin Singh, CEO and co-founder of buy now, pay later(BNPL) service hoolah, which was acquired by e-commerce platform ShopBack in 2021, was invited to speak at the conference. The ability to spread payments over a longer period can be a useful tool for some, he said, adding: “BNPL helps consumers, especially gig workers, manage cashflow.”
However, Linus Ng from the Consumers Association of Singapore (CASE), warned that the “seamless and frictionless sign-ups” may encourage consumers to make rash purchases. “Some of them fail to read the fine print attached to the flyers and posters,” he said. “Consumers may not know that they will be liable for late or penalty fees should they default on their monthly instalments.”
A key takeaway was the importance of educating consumers about BNPL services. CASE has offered a number of suggestions for credit co-operatives to take home and share with their members, including keeping track of spending, reading the fine print and ensuring sufficient cashflow to manage repayments.
In terms of how this new service might impact Singapore’s co-op credit sector, Yeo said that while there is some element of competition coming from BNPL services, there are also opportunities. Credit co-ops can consider exploring the business viability and feasibility of adopting BNPL services in order to future-proof themselves, he added.
“Local co-operatives can certainly tap on the technology and infrastructure that BNPL service providers utilise,” Ng agreed, but warned: “As co-ops are membership-based enterprises that operate primarily to benefit the greater society through consumer or credit services, they may not have the resources to leverage technology and infrastructure unlike businesses which are generally profit-driven and commercial.”
Delegates also heard from SNCF’s CEO Ang Hin Kee, who encouraged co-ops to attend the upcoming Annual Co-operative Leaders’ Conference, taking place in Malaysia this November, to learn how to future-proof themselves.
