Welcome to Trillion Credit, where we strive to educate and empower individuals with valuable insights into the financial landscape of Singapore. In this guide, we’ll explore the concept of exempt moneylenders and shed light on their role within the lending industry. Let’s delve into what it means to be an exempt moneylender and how it may impact borrowers.
What is an Exempt Moneylender?
In Singapore, The Moneylenders Act 2008 (“MLA”) prohibits persons from carrying on the business of moneylending unless they (a) are authorised to do so by licence, (b) have been granted an exemption, or (c) are excluded moneylenders.
An “exempt moneylender” refers to any person that has been granted an exemption by the Ministry of Law (“MinLaw”) from complying with various provisions of the MLA and its subsidiary legislation, including the requirement for a licence to lend money.
Therefore, exempt moneylenders can only engage in a limited scope of moneylending activities, such as lending to specific borrowers or for specific purposes.
Quoting SPS Rahayu Mahzam:
“Lending by exempt moneylenders must be assessed to have potential benefits, such as providing an avenue of safe credit to meet a specific need, while also having sufficient safeguards in place to protect borrowers.
Before granting any exemption to any applicant, MinLaw carefully examines the proposed lending model to ensure borrowers get safe access to credit with adequate protection. The factors considered include the profile of the applicant, the purpose of the proposed lending model, the prudency of the lending practices adopted, whether there are safeguards in place to protect potential borrowers and the economic or social benefits arising from the lending model.
For each exemption granted, the key features of the proposed lending model, including the charges on loans, are incorporated as conditions to the exemption, which the exemptee is expected to comply with. In addition, exempt moneylenders, like licensed moneylenders, are required to observe borrowing cost restrictions, to prevent them from extending loans with exploitative interest rates. An exemption can be revoked for non-compliance with its conditions.”
The list of exempt moneylenders can be found at https://rom.mlaw.gov.sg/information-for-borrowers/list%20of%20exempt%20moneylenders/
It’s important to note that although these exempt moneylenders are exempted from certain licensing requirements, they are still subject to other relevant laws and regulations that govern their specific activities. Borrowers should exercise caution and ensure they understand the terms and conditions of any loan agreement before engaging with any financial institution or moneylender, licensed or excluded.
Should you require any financial assistance or advice, feel free to contact our professional & friendly loan consultants today!
