The growth and vibrancy of the moneylending industry in Singapore has eased access to credit for locals.
They can now access loans to finance their personal and business needs without approaching a bank.
But along with this, opportunists in the form of unlicensed money lenders who harass borrowers or use unlawful tactics to get profits are becoming increasingly common.
So it helps to exercise caution by first determining that the lender you are dealing with is licensed to lend money in Singapore.
In this article, we discuss how to check a money lender license to verify a lender’s identity and its legitimacy to do business, and also point you to signs to look for to identify unlicensed money lenders.
How To Check A Money Lender License
Licensed money lenders in Singapore must be registered with the Ministry of Law (MinLaw). Their names should appear on the MinLaw registry, along with the company’s business address and the moneylending license number.
The process of confirmation is straightforward. It involves the following steps:
- Visit MinLaw’s website.
- Open the link in a fresh browser or download the list of licensed money lenders in Singapore as a PDF. Read through the list of money lenders and see if your prospective money lender is licensed and authentic.
- The list will also contain several companies that have had their licenses suspended. Check that list too to ensure that the money lender has lost its lending privileges by law.
The number of licensed money lenders in Singapore now stands at 154 and this number is updated regularly on the MinLaw website to reflect any changes reported.
Deception Tactics Used By Unlicensed Money Lenders
Unlicensed money lenders and scammers use the following tactics to get their targets to solicit loans from them in the following ways:
a) Contact Their Targets Directly
Unlicensed money lenders are known to notoriously contact their targets with unsolicited loan offers via text messages, emails, flyers, phone calls, or even in person.
They present attractive loan offers and may ask for some “processing fees” or “GST fees” before they can disburse the loan.
b) Run Fictitious Social Media Accounts And Websites
Unlicensed money lenders are not necessarily secretive about their operations.
Some have a strong online presence, often mimicking legit money lenders, even with web addresses that match those of licensed money lenders.
Many people have difficulty catching on to this tactic and end up falling victim to them.
c) Interested In Your Personal Information
Unlicensed money lenders are always looking to access your personal information to use it for unlawful purposes.
They may ask for your home address, Singpass, NRIC number and other personal details.
Others may give you the loan but use predatory practices to harass you. Such “lenders” are called loan sharks, and they leave borrowers worse off than they were before taking the loan.
To avoid getting caught in the traps of unlicensed money lenders, do not engage them in any way.
Do not respond to their text messages, emails, or calls. When they present their attractive offers, even if you need the money badly, don’t fall for it. It’s not worth it.
Always opt for a licensed lender.
What Licensed Money Lenders Cannot Do
This is a quick guide on acceptable practices of licensed money lenders.
- Send Messages Or Make Unsolicited Calls
Licensed money lenders are not allowed to solicit borrowers through text messages, social media platforms, or phone calls.
They must follow advertising rules that only permit solicitation through their websites, or ads on their premises. So a loan offer sent via any other platform is likely a scam.
- Approve Or Grant Loans Remotely
Licensed money lenders are required to meet the borrowers at the specified business premise for in-person identity verification before the loan is granted.
No loan transaction should be performed entirely online.
But unlicensed money lenders want a fast process and are willing to do it all virtually so they cannot be tracked or found.
Beware of such lenders.
- Ask For Payment To Disburse The Loan
A legal money lender in Singapore will deduct charges to process your loan from the loan principal after the loan has been granted.
The law does not allow lenders to ask for payment to initiate the loan process. Unlicensed money lenders, on the other hand, use the fees argument to legitimize their activities.
- Request For Your Singpass Logins
Licensed money lenders in Singapore are not allowed to seek personal information such as your Singpass username and password.
But an unlicensed lender will pressure you to share the information as part of its “approval process”.
- Retain Your ID And Personal Documents
A licensed lender will not retain your documents such as your employment pass, passport, driver’s license, work permit, or any such document.
But unlicensed money lenders will so that they can have something they can use to intimidate you until you repay the loan.
- Present A Blank Or Incomplete Contract
If the money lender fails to offer a loan contract, it’s likely a scammer.
Others offer blank, incomplete, complex or vague contracts, and do not bother to explain. They insist that you sign quickly.
- Use Threats, Insults Or Intimidation
The law does not allow the use of threats, vulgarities, abuse or violence by money lenders pursuing a debt.
If any lender behaves this way, you have a right to complain about them to the authorities.
Call the police hotline at 1800-255-0000 or visit this link.
How Money Lenders Apply For Their Licenses
Money lenders apply for licenses from MinLaw. Applicants must pay an upfront non-refundable fee of $600 and meet the registration requirements.
The requirements are:
- At least one manager must have passed the Money Lenders Test.
- Meet the requirements stipulated in Cap. 188 of the Moneylenders Act and the Moneylenders Rules.
The documents required are:
- Evidence of the sources and the availability of funds such as bank statement copies, income slips, IR8A of recent years
- Scanned copies of the front and back photos of all persons’ NRICs
- Managers’ education qualifications and certificates
Besides the $600 application fee, a $1,500 license fee, and a $20,000 security deposit are also required.
The processing time is four weeks, starting from the day the Registry of Moneylenders receives the application and documentation.
But note that the Registry has temporarily suspended the granting of new moneylending licenses for now.
Updating Or Renewal Of A Money Lender’s License
Updating or renewal of a money lender’s license is done entirely online.
Examples of updates that can be made include a change of business name, address, or contact details.
Others are the appointment of a new manager, employment cessation, onboarding of a new person, shares allotment or transfer, or a new employee.
As for changing the business premise or address, a copy of the landlord’s approval of the use of the premise for moneylending is needed, as well as some photos of the premise.
This information should be sent to the Registry within seven days of making the application.
Once the registry approves the change, the business should submit the following:
- Scanned copies of the tenancy agreement covering the rest of the license period
- Scanned copy of proof of ownership of premise (e.g. strata title deed or property tax forms)
- Photos of the proposed signage
If the business is allotting or transferring shares, it should submit the following:
- Clear and current ID cards of transferor and transferee
- Indication of the shares to be transferred
- Reason for the change
- Documented evidence of the source of funds
- Indication of the relationship between transferor and transferee
- Indication of whether the transferee will be a substantial shareholder
- Experience level of the transferee
- Relationship between the transferee and the family, friends or acquaintances of business partners
Note that before any of these changes, the Registry must first approve the online application and give the approval to update the information.
Criteria For Excluded Money Lenders
According to the Moneylenders Act, no person should carry on the moneylending business in Singapore without a license unless the business has been exempted or excluded.
An exempt money lender lends money primarily to corporates, trustees, limited liability partnerships, accredited investors, real estate trustees, and others.
Examples of these exempt lenders are registered societies, licensed pawnbrokers, and employers lending to employees as an employment benefit.
These are the only legit businesses you can borrow from, besides the licensed lenders.
Licensed Money Lenders Have To Abide By Rules
If you’re seeking the services of a licensed money lender in Singapore, contact Lending Bee.
We are a legit financial business with a money lender license registered with the Registry of Moneylenders.
It offers competitive loans with attractive benefits. The eligibility criteria are low, and nearly everyone can qualify for a loan.
Visit Lending Bee in any of its four locations: Orchard, Bedok North, Yishun or Jurong.
Call 6219 1611 today or apply for a loan now.
About Ashley Sim
Calling herself a “professional multi-tasker”, Ashley worked as a relationship manager in a bank for five years. She left her job just before the pandemic happened and became a freelance writer for about a year. Now, she’s making the most of her love for writing and knowledge of the banking and financial industry in her role as a content marketing lead. She hopes to help people make better financial decisions through her content and campaigns.