Clearing the debts of the poor reduces their anxiety and helps them focus better, possibly reducing the chances that they will make bad decisions which keep them mired in poverty.
This was a key finding of the first local study on how debt affects the poor, which was presented at a conference yesterday.
But before help groups rush to offer debt-relief schemes, researchers were quick to warn that their findings also showed giving the poor a fresh start made them less risk averse in the short term.
This suggests that they may do things such as buy lottery tickets, and inadvertently slip back into more debt.
This key study is believed to be the first local survey that establishes debt as a cause of poverty rather than just a conse…
Read the full article at: http://www.straitstimes.com/singapore/debt-relief-helps-poor-avoid-bad-decisions