SINGAPORE, December 2018 —

Towards the end of 2018, six licensed moneylenders in Singapore were selected by the Ministry of Law to participate in a pilot programme exploring alternative business models for moneylending. The initiative aimed to encourage innovation through digitalised and data-driven processes, while strengthening borrower protection and promoting responsible lending practices.

Learn more about Lending Bee’s role in the Ministry of Law pilot programme.

The six participating firms were selected based on a set of stringent mandatory criteria. These included the soundness and completeness of their business models, participation in debt assistance schemes, professional debt recovery practices, customer communication strategies, and effective cost of credit and credit policies. Each firm was also required to have a minimum paid-up capital of S$1 million, demonstrating both financial capability and a proven track record in providing consumer credit.

Under the pilot scheme, borrowers may be rewarded for making early repayments on their loans. This approach aims to incentivise positive repayment behaviour and reduce the risk of loan default. The pilot programme also places greater emphasis on the use of data and digitalised credit assessment processes to support more informed lending decisions and operational efficiency.

These measures form part of broader efforts to better protect borrowers through business-led improvements, while rewarding those with good repayment habits, according to a Ministry of Law media release.

Among the six participating firms, Credit 21 Pte. Ltd. and two other companies were allowed to apply to operate up to four outlets each under the pilot framework. Lending Bee Pte. Ltd., a licensed moneylender and subsidiary of Credit 21 Pte. Ltd., was selected to participate in the pilot programme and operated outlets in Orchard, Yishun, Bedok and Jurong East at the time.

“We see ourselves as pioneers in the evolving moneylending landscape. By digitalising our lending processes, we aim to help reduce the cost of borrowing for our customers. Through this moneylending pilot programme, we hope to destigmatise the notion of licensed moneylenders being a borrower’s last resort,” said Hazel, Branch Manager of Lending Bee’s Orchard outlet.

Lending Bee also developed a mobile application that allows borrowers to access their accounts around the clock, enabling them to make timely repayments and check their loan status. This digital approach supports greater transparency and allows borrowers who repay early to benefit under the pilot scheme.

In 2012, a moratorium was introduced to curb the number of moneylending licences issued in Singapore. Since then, the number of licensed moneylenders has declined significantly. With the pilot programme in place, the Ministry of Law stated that:

“The six firms will be allowed to apply for licences for up to 15 new outlets in total, which represents less than 10% of the 162 outlets currently operated by the 157 licensed moneylenders.”

The pilot programme was designed to run for up to two years starting from 2019, after which the Ministry of Law would assess the results and explore potential options to further improve Singapore’s moneylending regulatory framework.

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