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Apr 10, 2010
Moneylending rules protect borrowers
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CREDIT Counselling Singapore president Kuo How Nam suggested that moneylending rules be tightened further ('Review moneylending rules: Legalised loan sharking?', Wednesday).
The reality is that there are people who may need to borrow, but will not be able to do so from banks. A system has to be set up for them to borrow legally from non-banks. Current rules on moneylending provide for this and regulate such lending.
Interest rates are capped to protect low-income borrowers who borrow up to $3,000. If all interest rates are capped, as suggested by Mr Kuo, then there will be two likely consequences. Many who need to borrow will be unable to do so, and some will turn to loan sharks. The consequences will be worse. This has to be borne in mind when we seek to tighten the rules.
The legislation also requires moneylenders to tell borrowers upfront of the interest rates to be charged and all other charges. This has to be explained in a language that the borrower understands.
If the borrower finds the terms unacceptable, he can approach other moneylenders. There are 245 licensed moneylenders and the list is available at http://www.ipto.gov.sg
Such market competition works. Last year, more than 70 per cent of all unsecured loans made by moneylenders were at annual interest rates of 18 per cent or less.
=> So what's the median rate? Why the fudging with stats again? And what's the EFFECTIVE INTEREST RATE after factoring the hidden cost? It sure looks like there are many connected individuals among these 245 Leegalized Ah Longs!
If borrowers have any complaints against moneylenders, they can contact the Registry of Moneylenders on 6325-2585 or e-mail [email protected]
The Registry of Moneylenders will take to task errant moneylenders who flout moneylending rules.
Wong Lai Yin (Ms)
for Registrar of Moneylenders
Insolvency and Public Trustee's
Office, Singapore
Moneylending rules protect borrowers
<!-- by line --><!-- end by line -->
<!-- end left side bar --><!-- story content : start -->
CREDIT Counselling Singapore president Kuo How Nam suggested that moneylending rules be tightened further ('Review moneylending rules: Legalised loan sharking?', Wednesday).
The reality is that there are people who may need to borrow, but will not be able to do so from banks. A system has to be set up for them to borrow legally from non-banks. Current rules on moneylending provide for this and regulate such lending.
Interest rates are capped to protect low-income borrowers who borrow up to $3,000. If all interest rates are capped, as suggested by Mr Kuo, then there will be two likely consequences. Many who need to borrow will be unable to do so, and some will turn to loan sharks. The consequences will be worse. This has to be borne in mind when we seek to tighten the rules.
The legislation also requires moneylenders to tell borrowers upfront of the interest rates to be charged and all other charges. This has to be explained in a language that the borrower understands.
If the borrower finds the terms unacceptable, he can approach other moneylenders. There are 245 licensed moneylenders and the list is available at http://www.ipto.gov.sg
Such market competition works. Last year, more than 70 per cent of all unsecured loans made by moneylenders were at annual interest rates of 18 per cent or less.
=> So what's the median rate? Why the fudging with stats again? And what's the EFFECTIVE INTEREST RATE after factoring the hidden cost? It sure looks like there are many connected individuals among these 245 Leegalized Ah Longs!
If borrowers have any complaints against moneylenders, they can contact the Registry of Moneylenders on 6325-2585 or e-mail [email protected]
The Registry of Moneylenders will take to task errant moneylenders who flout moneylending rules.
Wong Lai Yin (Ms)
for Registrar of Moneylenders
Insolvency and Public Trustee's
Office, Singapore
