The Registry of Moneylenders (RoM) oversees the registration and regulation of moneylenders in Singapore. It determines who should be among the list of licensed moneylenders in Singapore. Hence, it also has the power to revoke license should there be violation of the Moneylenders Act committed by a licensed money lender.
Primary Responsibilities
Licensing: The Registry of Moneylenders (RoM) has e-services facility to assist Singapore moneylender business or person to their license registration. The Registry will decide whether or not to grant you the license.
You need to undergo the Money Lender’s Test that will determine your level of understanding and knowledge of the Moneylenders Act and other money lending rules in Singapore.
Issuance or refusal to issue license: The Moneylenders Act provides the ground for refusing the issuance of license.
Any person who is aggrieved by the refusal of the Registrar to issue or renew a licence may, within 14 days of being so informed, appeal in writing to the Minister whose decision shall be final.
Renewal of license: The Registrar has the power to renew or refuse to renew a license. The application for the renewal of license should be made by the applicant one month before the date of expiry of the license.
Should the licensee decide not to renew the license, the said licensee still has the responsibility to inform the Registrar of such intention at least one month before the expiry of the license.
Revocation of license: The Registrar shall, before revoking or suspending any licence, give the licensee notice in writing of his intention to do so, specifying a date, not less than 21 days after the date of the notice, upon which the revocation or suspension shall take effect unless the licensee shows cause to the Registrar as to why the licence should not be revoked or suspended.
Approval of places of business: The authority to approve the place of business of a licensee or an applicant for the issuance of license is vested on the Registrar. The applicant must submit a written application.
Certain requisites must be complied with before the Registrar approves the place of business of moneylending. These requirements include being a licensee, having completely submitted truthful material information pertaining to his application for the approval of place of business, and ensuring that the place should be found suitable by the Registrar to operate a moneylending business.
Regulation of Business of Moneylending
Regulation of advertising and marketing: The Registrar sees to it that all licensed moneylenders in Singapore will not publish or cause to publish any advertisement that contains any information that is false or misleading. It may issue directions to any moneylender with regard to the issue, publication or contents of advertising and marketing materials as well as the conduct of such advertising and marketing activities.
The Registrar has already released certain guidelines that help borrowers easily determine the legitimacy of moneylenders. There is presumption of illegality when the marketing or advertising material does not state the name of the business, or states the same but in a inconspicuous manner, when the interest rate posted is lower than the actual rate charged,
Prohibition of unsolicited loans: The Registry of Moneylenders don’t allow moneylenders to initiate application of loan. They have to wait first for borrowers to apply to them in writing for a loan.
Instances of unsolicited loans include granting a loan even without prior loan application form and directly sending an article to any person pertaining to loan services of moneylenders.
Signage at place of business: The Registry requires that all licensee shall affix, in a conspicuous position at or in each of his places of business, a sign bearing his business name and the words “Licensed Moneylender” in the English language such as to be visible to any person immediately outside the place of business.
Terms of loans: Money lenders should ensure that the terms and conditions of the loan are made known to borrowers before the latter are asked to sign any loan contract. Borrowers must certify in writing that the money lender has explained the terms and conditions to them.
Any violation of the law is an offense that is penalized either by a fine or imprisonment.
Provision of statement of accounts: Under the Moneylenders Act, a money lender has the obligation to provide a statement of accounts, at least once every half a year, to each of their clients. This must be free of charge.
Charges other than permitted fees unenforceable: The Ministry of Law has the discretion to determine which charges and expenses may be charged by money lenders.
It may prescribe different types and amounts of costs on different classes or descriptions of borrowers and in relation to different classes or descriptions of loans.
No fees other than what are specifically allowed may be charged.
Maximum interest rate and late interest: Under the laws of Singapore pertaining to the moneylending business, all licensed moneylenders in Singapore should abide with the maximum interest and late interest rates.
This means that a moneylender should not be charging an interest and late interest that is more than what is prescribed by the Ministry of Law.
Harassing borrowers: Singaporeans and foreigners who borrow are protected by the laws of Singapore against any form of harassment both from scammers and licensed moneylenders.
Harassment could be the use of any threatening, abusive or insulting words, behaviour, writing, sign or visible representation. It can also be committed by any act likely to cause alarm or annoyance to borrower or surety, any family member of the borrower or surety, or any other person.
A complaint may be filed should harassment occur.
Power of police officer, public prosecutor’s power to inspect: Any police officer that is authorised in writing by the Registry of Moneylenders (RoM) may enter the business premises of a money lender at all times. The purpose of which must be to inspect book of accounts and other documents to determine any anomaly, if any, against the proper conduct within the moneylending industry.
Advisory for Borrowers on Licensed Moneylending
Things to consider before borrowing
List of licensed moneylenders: Check the website of the Registry of Moneylenders to know whether or not the money lender is a licensed moneylender. https://rom.mlaw.gov.sg/information-for-borrowers/list-of-licensed-moneylenders-in-singapore/
Advertising restrictions: Licensed moneylenders can only advertise through the use of their official business website. They cannot send direct messages like SMS regarding their services. Moreover, they cannot even advertise using social media accounts.
Report any violation to the Registry of Moneylenders (RoM) through its website. You may also contact the Registry at 1800-CALL-LAW (1800 2255 529).
Requirements when granting a loan: Before granting loan, a money lender should (1) explain the terms and conditions of loan using a language that the client understands; (2) give a signed copy of the loan contract that contains the terms; and (3) give a separate cautionary statement in writing.
For existing loans, licensed moneylenders in Singapore must (1) issue receipt for each repayment made; and (2) provide a statement of accounts once every half year.
Caps on loan costs: Any money lender in Singapore can only charge (1) one-time administrative fee of not more than 10% of the total loan; (2) interest rate and late interest rate both not exceeding 4% per; and (3) late fee not exceeding $60 per month.
Caps on loan amount: Your annual income will determine the loan amount you can may borrow. Aside from that, your citizenship whether you are a Singaporean or a foreigner will also matter.
For example: If your income is less than S$10,000, you can loan up to S$3,000 if a citizen of Singapore and a resident but if you are a foreigner and resident, your maximum loan would be S$1,5000.
If your annual income is between S$10,000 to less than S$20,000, you are entitled to a maximum of S$3,000 regardless of nationality.
If your annual income is at least S$20,000, you can have up to 6 times your monthly income whether you are a citizen of Singapore or a foreigner.
Debt collection: The Ministry of Law allows money lender to engage debt collectors to help in debt collection. However, debt collectors are prohibited from doing any violent, threatening or harassing behavior or activities.
Your credit report: Licensed moneylenders get to properly assess the credit worthiness of applicants through the records collated, kept, and updated by the Moneylenders Credit Bureau (MLCB). MLCB is a central repository of data pertaining to the loans and repayment records of borrowers. Both moneylenders and borrowers may purchase the latter’s credit records from MLCB before granting or applying for, respectively, the loan. https://rom.mlaw.gov.sg/files/MLCB_Infographic.pdf
Closing
Any encounter with scammers or licensed money lenders that violate the law should be reported to the authorities. You may (1) make a police report; (2) lodge a complaint with RoM; (3) apply for a Protection Order; or (4) initiate civil proceedings to demand for damages against the licensed moneylenders or debt collectors.
If you encounter money lenders asking for your SingPass User ID and other delicate information, report them immediately because they are violating the Moneylenders Act.
Raffles Credit is a licensed moneylender in Singapore that has helped many Singaporeans and foreigners with their financial troubles.
It prides itself of its loan packages that have served and continuously cater clients with varying personal and business needs. It believes that no matter what your credit standing is, you must still have equal and easy access to financial services.
