5 Untold Ways Licensed Money Lenders in Malaysia is Different

Some even include violence when the debtors can’t pay them back. The interest rate will be quite high that you can’t even pay them back.

When you see these scenarios, these loan sharks are denitely illegal. Licensed money lenders aren’t the same as loan sharks; they operate like other legal businesses. You may be confused what’s the dierence between both, and you tend to mix both up.

There are regulations under the Moneylenders Act 1951 for licensed money lenders to follow. The most important thing is knowing the dierence between licensed money lenders and illegal loan sharks. This article will tell you more about how dierent licensed money lenders in Malaysia

Loan Shark? Illegal? Money Lending in Malaysia us

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Unlike illegal loan sharks, who ignore the law, licensed money lenders must apply for a license every two years to operate their businesses. Under Section 5(2) of the MA, if they fail to apply for a license, they can be ned between RM250,000 to RM1,000,00 or jail up to 5 years. Repeat oenders will also get whipped.

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You can look out for their original license when you are in their oce. The original license needs to be displayed at the oce under Section 5F. They would get penalized up to RM10,000 and/or up to 6 months in jail if they did not display their license. You want to be careful who issued the license. The license is issued by the Ministry of Urban Wellbeing, Housing and Local Government, not Bank Negara. Licensed money lenders have a strict set of rules to follow. You can nd them under Section 9 of the MA.

Ensure that you request to have a look at their original license to ensure they are operating legally. They may be up to something if they don’t want to show you.

Licensed Money Lenders #2 – The Law Controls The Interest Rate They Charged

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One biggest dierence between licensed money lenders and illegal loan sharks is the interest rate they charge you. Interest rate is generally charged by month or year, but some illegal loan sharks may charge daily or hourly on the interest rate. Some licensed money lenders may abuse their licenses to charge a higher interest rate, so be careful with that. Contact us

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All businesses will need advertising and marketing to get new customers. This includes licensed money lenders. Controlling their advertising and marketing is to regulate the moneylending profession. Having agents and direct sellers going around to advertise their service that you don’t need is the last thing consumer need. Agent and direct sellers for moneylending business are probably unsuitable as not everyone needs to borrow money.  Section 27A prohibits licensed money lenders from employing agents or canvassers to promote their service. us

If licensed money lenders want to advertise their business, they will need to apply for a permit for each advertisement they want to put up. The advertisements need to be dierentiated from all other illegal loan sharks advertisements we see on the streets.

On the news, you will see loan sharks harass borrowers and their families to make them pay up. But for licensed money lenders, it is illegal for them to come out with dierent techniques to harass borrowers. They need to use proper methods to collect late payments.

What can licensed money lenders do to collect back their payment is to send reminders, send debt collectors to get the payment back, issue letters of demand, or ever blacklist you on credit rating agencies such as CTOS. There won’t be any splashing red paint or any other illegal activities to ask you to repay your dets, but that doesn’t mean you don’t have to pay back your money.

So when reaching out to a licensed money lender, these are the dierences you can dierentiate from an illegal loan shark. Henfen Financial is one of the licensed money lenders based in Kuching. You can check out their service if you need it.

With over 20 years of experience, we have helped many businesses and individuals solve their nancial problems. With loose condition applications, we tailor our loan service according to their need to help them through dicult times. Our service

WePropertyCommercialPersonalincludes:LoanLoanLoanprovidethebest loan service in Kuching. If you need any help with your nancial need, feel free to contact us and see how we can help you.

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