The moneylending industry of Singapore is made complicated by unlicensed moneylenders operating at the guise of licensed moneylenders. The Ministry of Law passed the Moneylenders Act to deter all illegal moneylending services with the help of the Registry of Moneylenders (RoM).
The Registry of Moneylenders (RoM) supervises both the registration as well as the regulation of all licensed moneylenders in Singapore. It also has the power to revoke it should complaint against the services of moneylenders prove to be against the law.
1. Issuance or refusal to issue license
The Registrar may either issue or refuse to issue a license to carry out the business of money-lending in Singapore. To be recognized by the Registry of Moneylenders (RoM) as a licensed moneylender, one must be authorized through a license, one is an excluded moneylender, or one is an exempt moneylender.
2. Renewal of license
The application for renewal of license to operate as legal money lender in Singapore should be filed not later than one month before the expiry of the license.
3. Revocation of license
The power to grant license comes with the power to revoke it should the Registrar determine that a ground for refusal of issuance or renewal of license exists.
4. Approval of places of business
In order to validly carry out a moneylending business in a new place or places of business, an applicant for the issuance of a license should apply, in writing, to the Registry of Moneylenders (RoM). The approval of application may be with or without a condition.
The Registry may also refuse the grant of application for reasons provided under the Moneylenders Act such as when the applicant provided an incomplete, false or misleading information that is pertinent to the approval of application.
Regulation of Business
1. Advertising and marketing
The Ministry of Law prohibits any licensed moneylender from publishing or causing to publish advertisement material that is misleading or false.
2. Prohibition of unsolicited loans
Licensed money lenders in Singapore are prohibited by the Ministry of Law from granting a loan without the applicant having first sent a loan application form and subsequently signed a contract.
Licensed moneylenders can neither ask for your SingPass User ID nor retain your NRIC card or other personal ID documents.
3. Signage at place of business
The Moneylenders Act mandates every money lender in Singapore to put up a signage in a conspicuous position at his office containing his business name and the words “Licensed Moneylender” in the English language.
4. Terms of loans
The Ministry of Law mandates moneylenders to inform clients the terms and conditions of contract both verbally and in writing.
5. Provision of statement of accounts
Statement of accounts should be provided for by moneylenders to clients at least once every half a year ending on 30th of June or 31st of December. It shall be free of charge when sent through courier. If not, it may be sent through your indicated e-mail address.
6. Charges other than permitted fees
The Ministry of Law may prescribe to moneylenders various types charges, fees and costs that they may charge against borrowing Singaporeans and foreigners. Any sum in excess of permitted fees should revert back to the borrower under the means specified by the Ministry of Law.
7. Maximum interest rate and late interest
Moneylenders in Singapore should not charge more than what the Ministry of Law prescribed as the maximum interest rate and late interest for the different loan services.
8. Harassing borrowers
The laws of Singapore prohibit any act of harassment in connection with the loan against Singaporeans and foreigners alike and whether such act is committed directly by the money lender or any person acting on his behalf.
9. Power of police officer, public prosecutor’s power to inspect
Should you experience harassment from unlicensed moneylenders, report them immediately to the police or public prosecutor for proper investigation. Complaint against money lenders committing any of the prohibited acts should be reported to the Small Claims Tribunal.
To recover from any serious debt problem, there are certain groups like the Blessed Grace Social Services that provide credit counseling and general credit management tips that you may directly contact for help.
Advisory for Borrowers on Licensed Moneylending
Things to consider before borrowing:
- The list of licensed moneylenders, found on the website of the Registry, is a guide to knowing whether the moneylenders you are in transaction with are licensed moneylender or scammers. Due diligence compels you to check this list before agreeing to any loan contract.
- Advertising restriction. The Ministry of Law imposes advertising restrictions on moneylenders. There are only three advertisement channels moneylenders can utilize: first, through consumer directories (in print or online media); second, through their official website; and lastly, their business premises.
- Caps on loan amount. The intention of the Ministry of law in setting a cap on loan amount is for the benefit of both licensed moneylenders and borrowers. The Ministry of Law desires that the moneylending business will go smoothly as it can by avoiding defaulting consumers. On the other hand, to ensure that all borrowing individuals would not loan an amount which is more than their capacity to repay.
- Debt collection. The Ministry of Law avoids any human right violation against borrowers, defaulting or not. Part of its enforcement job is to ensure that moneylenders would neither perpetrate nor tolerate any harassment, threat or intimidation especially during debt collection.
- Your credit report. Purchase your credit report from the Moneylenders Credit Bureau (MLCB) because moneylenders are mandated by the Ministry of Law to purchase the same to assess your creditworthiness. Such is also a means to help moneylenders know how much of their moneylending services you can borrow.
To report unlawful moneylending services to the Registry of Moneylenders, information like the moneylender’s business name, license and contact numbers are necessary for the initial investigation. Contact the Registry of Moneylenders at 1800-2255-529 or through its website.