How Do The Licensed Money Lender New Rules Protect Borrowers?


Moneylending provides individuals and businesses with financial support in the form of loans.

In order to make this industry regulated and prevent people from being cheated by unlicensed money lenders, the Registry of Moneylenders has put in place the Moneylenders Act and Rules.

In 2018, these rules were revised and strengthened in order to better protect borrowers. 

So how do the new rules for licensed money lenders protect borrowers? 

Read on to find out how licensed money lender new rules work in Singapore.

Moneylenders Act

The Moneylenders Act in Singapore is a set of guidelines that all licensed money lenders have to follow. 

It includes regulations such as the maximum amount of interest the lenders can charge, the number of times they can roll over a loan, and other important rules.

The Act also stipulates what is acceptable and prohibited in terms of the collection, use and disclosure of borrower data.

The new changes in the Act follow a progressive approach to enforcing the regulations by considering more advanced moneylending operations for the modern economy.

Moneylenders Rules

These are the specific rules that were rolled out in tandem with the new Act that licensed money lenders have to follow in order to operate legally in Singapore.

They are designed to protect borrowers from being taken advantage of by licensed money lenders.

It focuses primarily on unsecured loans offered by any licensed money lender in Singapore. 

It states what is the legally acceptable amount of money depending on the income status of the borrower and the purpose of the loan.

Moneylenders (Prevention of Money Laundering and Financing of Terrorism) Rules 2009

In addition to the Moneylenders Act, the Registry of Moneylenders also put in place the Moneylenders (Prevention of Money Laundering and Financing of Terrorism) Rules 2009.

This was done in order to prevent licensed money lenders from being used for illegal activities such as money laundering and terrorist financing.

Money laundering is defined as the act of concealing the origins of illegally obtained money. It involves turning illegally sourced money into legal funds by running it through a series of transactions.

Terrorist financing refers to the act of providing money or financial services to individuals or groups that are involved in terrorist activities.

Licensed money lenders must take reasonable measures to prevent their services from being used for such illegal activities. They are also required to report any suspicious transactions to the authorities.

In these licensed money lender new rules, advanced guidelines are provided regarding Suspicious Transaction Reports (STRs). 

A STR is a report filed by a licensed money lender that suspects its services are being used for money laundering or terrorist financing.

Key Points To Note With The Moneylenders Act And Rules

As a borrower, you should be aware of the following: 

  • There are loan caps to be adhered to while borrowing from any licensed money lenders in Singapore.
  • The maximum interest rate that a legal money lender can charge you is 4% per month –

no matter what your annual income is.

  • Late interest is only applicable to the amount that is due and not repaid, not outstanding amounts that are not yet due.
  • There is a list of licensed money lenders mentioned in the Ministry of Law’s website that you can refer to in order to check if a money lender is licensed or not. This list is updated regularly. It is available online and can be downloaded as a PDF for easy reference. 
  • Legal money lenders are only allowed to advertise their services through three channels: consumer or business directories, their own websites, and on or on the exterior of their business premises.

What The New Moneylending Regulations Are About

The licensed money lender new rules with regard to the Moneylenders Act and the Moneylenders Rules help borrowers get personal credit from legal money lenders in Singapore safely.

The updates offered by the Registry of Moneylenders in these regulations ensure that there is better protection for borrowers in terms of moneylending. 

It also strengthens the rules and regulations for licensed money lenders.

How Licensed Money Lender New Rules Protect Borrowers

Out of the many ways licensed money lender new rules aim to protect borrowers, here are some key points to note.

Aggregate Loan Caps

The Registry of Moneylenders introduced aggregate loan caps. This means that any individual in Singapore can borrow only a limited amount as a loan from all the licensed money lenders in the country combined.

Also, the allowed amount depends on the annual income of the person. Lower-income earners can borrow less as compared to middle- or high-income individuals.

This sets a limit on how much total debt a person can have and therefore prevents them from being over-indebted.

Here are the loan caps set for individuals including Singapore citizens, permanent residents and foreigners residing in Singapore.

The maximum loan amount for Singapore citizens and permanent residents is: 

  • $3,000 if the annual income is less than $20,000
  • Six times the monthly income if the annual income is more than $20,000

The maximum loan amount for foreigners residing in Singapore is: 

  • $500 if the annual income is less than $10,000
  • $3,000 if the annual income is between $10,000 and $20,000
  • Six times the monthly income if the annual income is more than $20,000

Data Protection

A new regulatory framework was set up for the Moneylenders Credit Bureau (MLCB) to handle data better. 

Guidelines were created on how the MLCB and legal money lenders will handle the borrower data to ensure confidentiality and security.

Functioning as a central repository of this data, the MLCB will help money lenders make more informed decisions with regard to lending.


A self-exclusion framework was introduced to allow borrowers to opt themselves out of borrowing money from licensed money lenders in Singapore.

This is a way for those who are struggling with debt to break the cycle and regulate their borrowing patterns or to participate in debt assistance schemes.

Suspicious Transaction Reporting

In addition, changes were made to include situations in which licensed money lenders can make suspicious transaction reporting on any assistant they employed.

Some examples of such instances are when an assistant has: 

  • Been accused of dishonesty or moral turpitude
  • Had a moneylending business for which the license was revoked or had its approval cancelled as per the supporting regulatory Act
  • Been accused of not abiding by or contravening any regulations of the Moneylenders Act or relevant Act

Strengthened Regulations For Licensed Money Lenders Singapore

To regulate the licensed money lenders, the Registry of Moneylenders has strengthened the regulations in the following ways:

Need For Approval

Legal money lenders in Singapore must seek approval from the Registry of Moneylenders in a few cases. Examples include:

  • For a legal money lender in Singapore to employ any assistant in the business. This includes employing or engaging any person for the purpose of handling any part of the moneylending business or to collect debts on its behalf
  • For an individual to become a shareholder of a licensed money lender
  • For anyone to increase their shareholdings in a licensed money lender

Also, this approval must be requested in a way that the Registrar specifies. The Registrar has the full authority to either approve or reject the application.

There are also certain conditions for cancellations of approved applications that have been added in the new rules, such as:

  • If it is seen that the approval is obtained by fraudulent means or by misinterpreting any information
  • If the Registrar no longer believes that the person is a good fit for the position or of good character as depicted

In the above cases, the Registrar must give an opportunity for the money lender to be heard.

With all these measures in place, the Ministry of Law is able to better ensure that licensed money lenders are held accountable for the people they employ. 

These rules also strengthen the regulation of shareholders.

Regulatory Cap Breaches

With these licensed money lender new rules, there are now many regulations and loan caps set on the interest rate and fees a licensed money lender can charge. 

When any legal money lender breaches these regulations and gets into a contract with a borrower, such cases are also considered a legal offence.

So it is mandatory for all licensed money lenders to comply with all the set regulations to avoid any legal penalties.

Additional Measures To Professionalise The Moneylending Industry 

Under the licensed money lender new rules, additional legislative measures have been put in place to professionalise the moneylending industry in Singapore.

Licensed money lenders must be incorporated as companies that will be limited by shares with at least $100,000 in paid-up capital.

They also need to do an annual audit and must submit their accounts for approval each year through the Registry of Moneylenders.

This change ensures that licensed money lenders are more responsible and transparent in their financial dealings.

It also provides greater protection for borrowers as licensed money lenders will be held to higher standards of corporate governance.

Licensed Money Lender New Rules Protect Borrowers 

To sum it up, the licensed money lender new rules ensure that the borrowers are protected in moneylending transactions. 

They also ensure that licensed money lenders are better regulated and professionalised with a streamlined workflow and clear rules to follow.

With the betterment of the Moneylenders Act and Moneylenders Rules, borrowing from licensed money lenders in Singapore has become a much safer and more secure process.

Looking for a reliable licensed money lender in Singapore?

Visit Katong Credit now and check out our competitive loan offers.

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