The Ministry of Law (MinLaw) will be imposing new regulations on borrowing from licensed moneylenders from 1st October 2015. The new regulations will mark the first of several changes that MinLaw will be making to strengthen the moneylending regulatory framework.
Under the new regulations, loans from moneylenders will be subject to the following caps:
- An upfront administrative fee of not more than 10 per cent of the loan principal;
- Interest of not more than four per cent per month;
- Late interest of not more than four per cent per month;
- Late fee of not more than $60 per month; and
- Total borrowing cost of not more than 100 per cent of the loan principal.
These caps will not apply to loans granted to businesses which have been registered for at least two years before the grant of the loan. They will also not apply to loans granted before 1 October 2015.