Credit Intelligence (ASX:CI1) CEO Jimmie Wong speaks to The Capital Network’s Executive Director Lelde Smits about why global debt is increasing and how personal bankruptcy is becoming a bigger threat.
Mr Wong holds a Bachelor of Laws degree from the University of Hong Kong. Mr Wong has over 20 years’ experience as a leading insolvency lawyer having served as legal adviser to numerous financial institutions and groups.
Mr Wong has provided legal advice in relation to cross-border takeovers and mergers, corporate finance, IPOs and foreign direct investment and explains who is at the biggest risk of personal bankruptcy and what options people have when they cannot service their debt.
Lelde Smits: Hello, I’m Lelde Smits for The Capital Network, and joining me from Hong Kong is international, personal finance expert, Jimmie Wong. Jimmie, welcome.
Jimmie Wong: Hello.
Lelde Smits: Jimmie, you originally started as a lawyer. You founded your own law firm, then you founded Australian-listed Credit Intelligence Limited (ASX:CI1) that helps people with their personal finance, and also to avoid bankruptcy. Why do you believe that debt is a growing problem?
Jimmie Wong: I think it’s common knowledge that personal debt is a global problem and it will happen in every country. There will be people who can’t afford to pay their debt after they borrow to a certain limit, because the interest rate is so high they cannot afford to repay the debt in full. And the global economy I foresee there will be a downturn in the coming years, and we will see more problems for the people borrowing money, whether personal debt or mortgage loan.
Lelde Smits: Certainly, so because you foresee this global downturn - so harder economic times ahead - this will impact people with their personal finances?
Jimmie Wong: Yes.
Lelde Smits: If you can explain, perhaps the environment in Hong Kong, what have you already seen - because of course your company was founded in Hong Kong - what have you already seen is happening to people’s personal finance and debt burdens in Hong Kong?
Jimmie Wong: Hong Kong had a great problem in 1997 because of the Asian financial crisis. The property prices dropped 70%. 10 million properties up to 3 million properties. So, a lot of people, a lot of families in great trouble. They cannot afford to pay their mortgage loan. They cannot afford to pay their personal debt. So many people have to choose bankruptcy.
Lelde Smits: We often hear about China having a potential downturn, and that of course impacting global market - Hong Kong and Australia - what is your outlook for Chinese growth? Do you think it is as bad as people are saying that it might be?
Jimmie Wong: I think I see a big problem for China’s economy in the coming years also, because of the debt problem. The government debt, the corporate debt and the personal debt.
Lelde Smits: And in Australia of course, we’re hearing that our housing prices are softening. What’s your outlook for Australia when you consider headwinds headwinds such as Chinese debt and housing prices in Australia?
Jimmie Wong: Yes, I’m very concerned with the global economic news. I read the news every day about the economy in Hong Kong, in China, in USA and also in Australia, and I noticed that there will be a downfall in the property market in Australia. And it may have a bad effect on people who have borrowed money on mortgages.
Lelde Smits: That’s something that you have highlighted that if people seek assistance, there are solutions. You don’t need to drown in your debt.
Jimmie Wong: Yes, so people have to become positive and try to resolve their debt problem in a positive manner - not try to avoid the problem. Try to solve the problem at the earliest opportunity.
Lelde Smits: Excellent advice. Thank you, Jimmie Wong.
Jimmie Wong: Thank you.