Licensed ‘ah long’s?

Pawnshops have been advertising on various media, and legal moneylenders pepper the island. This is good news for those in need of quick cash, but bad news for society in general. After all, personal finances must be dire if these businesses are able to thrive.

Licensed moneylenders may be a better alternative to the traditional – and also very illegal – loan sharks that people used to approach, but the methods used between both bear a lot of similarities.

Loan shark

Most people would choose to go to licensed moneylenders, if nothing but the sheer fact that they are legal and would probably save themselves the trouble of being subjected to some of the more extreme of the loan sharks’ debt collection methods. No more pig heads hung outside the door, no more embarrassing O$P$ spray painted along public corridors of housing estates, no more threats.

The police were called after debt collectors, allegedly from a registered moneylending business, got a little too rough while trying to recover $21,000 from a food stall owner at Funan Mall. Utensils, cooking equipment and even the cash register were swept to the floor, and the collectors returned with a banner that announced that they were collecting debt.

Debt collector

According to the law, these licensed moneylenders need to seek approval from the Registry of Moneylenders before attempting to recover the loan, as well as all other aspect of their business, to ensure that the people operating and/or working in the moneylending business are credible and proper. Having said that, these moneylenders are allowed to go about their business as long as they do not commit any crime.

More concrete laws and regulations should be set in place to govern licensed moneylenders. After all, they are already registered and have approval to operate. Without stricter regulations, these legal moneylenders are just a tad bit more respectable than the loan sharks.

Labour MP Zainal Sapari once shared in Parliament about plans to further regulate licensed moneylenders. And this threw up some shocking revelations about the business: effective interest rates of 43000% and 159,000% (no typos there), fee charges that were larger than the loan principal, and other practices which he called “absurd”.

Mr Sapari had asked for several measures, including 1) overall caps on interest and charges payable within a credit year, 2) definitions and stipulations on the types of charges moneylenders can impose, 3) limits to the total amount payable in a credit year after which the loan is considered fully discharged.

But Law Minister K Shanmugam was reluctant to give assurances on a timeline for a rollout of these changes, nor which would be implemented, citing concerns about the industry “going underground”.

How many more of these incidents do we need to have fiercer policing of this intimidating industry?

 

 

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About the author

Audrey Kang

Audrey Kang is a born and bred Singaporean girl about to embark on a two year solo life abroad to study Politics and International Relations at the University of Melbourne. She's maniacal about reading and writing and will write almost everything from sports to travel to current affairs, and will even read the back of a milk carton if she's bored enough.

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1 Comment

  • Ah long is better than those who with listed moneylenders….
    Listed moneylenders is whose than ah long….. why gov can give all this fucker in businesses…

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