In the spotlight: Moneylending industry under review

New committee to tackle excessive borrowing costs.

A newly-formed advisory committee on moneylending will review the moneylending regulatory regime and recommend suitable measures to strengthen the framework, the Ministry of Law announced today.

The 15-member committee includes representatives from the moneylending industry as well as voluntary welfare organisations which help distressed borrowers.

“We hope that, with the diversity of representation in the committee, we can provide a holistic perspective on the measures necessary to strengthen the moneylending regulatory regime,” stated Manu Bhaskaran, Chairman of the Advisory Committee on Moneylending.

Here’s more from MinLaw:

The committee will review the existing framework and make its recommendations on measures for:

i.Capping of interest rates for moneylending loans;
ii.Restricting the charging of fees by moneylenders;
iii.Capping the aggregate amount of moneylending loans taken out by each borrower; and
iv.Other policy parameters which could strengthen the moneylending regulatory regime.

The committee will begin work on 25 June 2014 with a view to complete their consultation and submit recommendations to MinLaw later this year.

During the Committee of Supply Debate 2014, Senior Minister of State for Education and Law, Ms Indranee Rajah, noted concerns raised by Members of Parliament over the moneylending landscape in Singapore, particularly excessive borrowing and excessive borrowing costs.

Ms Indranee mentioned that MinLaw intended to consult key industry stakeholders, including organisations that provide counselling to distressed borrowers and the moneylending industry, amongst others as part of the review on the moneylending industry.

She highlighted the importance of striking the right balance between giving adequate consumer protection to borrowers and preserving their access to credit.