A new digital portal is being developed to record and monitor transactions between licensed moneylenders and borrowers in real time. The initiative aims to enhance transparency and strengthen consumer protection under the Moneylenders Act 1951, according to Deputy Housing and Local Government Minister Datuk Aiman Athirah Sabu.

Centralised System To Strengthen Oversight

Aiman Athirah explained that the digital platform, currently in the pilot project stage, will act as a central data repository system for both borrowers and licensed moneylenders.

The platform will allow loan transactions to be recorded in real time and will include digital monitoring and payment features. These functions are expected to improve regulatory control and ensure fair practices across the industry.

She added that the system will not impose any additional charges on members of the public seeking loans from licensed moneylenders.

Added Protection For Borrowers

To further protect borrowers, the new system will incorporate a loan insurance protection scheme, providing coverage for eligible borrowers. This measure is part of ongoing efforts to ensure borrowers have access to safer and more transparent financing options.

Aiman Athirah also noted that the ministry is finalising the proposal and will proceed with full implementation once the pilot project is completed and reviewed.

Interest Rate Limits Under The Moneylenders Act 1951

Under subsection 17A(1) of the Moneylenders Act 1951, strict limits are in place to prevent excessive interest charges by licensed moneylenders.

For secured loans, the maximum interest rate is capped at 12% per annum (1.0% per month). For unsecured loans, the rate cannot exceed 18% per annum (1.5% per month).

Licensed moneylenders who charge interest rates above these limits, or impose interest exceeding the principal loan amount, may face penalties under Section 17A. Offenders can be fined up to RM20,000, imprisoned for up to 18 months, or both.

Restrictions On Additional Charges

Aiman Athirah reminded the public that Section 23 of the Act prohibits licensed moneylenders from imposing any charges beyond what is legally allowed. Only stamp duty costs and legal witnessing fees (the cost of having a loan agreement officially verified) are allowed, as stated in the prescribed loan agreement format under the Act.

Encouraging Public Awareness And Vigilance

The deputy minister urged borrowers to stay vigilant and informed about their rights when dealing with licensed moneylenders. She emphasised that borrowers should always verify the legitimacy of lenders before entering into any financial agreement.

Licensing status can be verified through the i-KrediKom application for Peninsular Malaysia, or by contacting the licensed moneylenders (PPW) licensing authority in Sarawak, Sabah, and the Federal Territory of Labuan.

How To Lodge Complaints

Members of the public who suspect violations of the Moneylenders Act 1951 may submit complaints to the Ministry of Housing and Local Government (KPKT) through the Public Complaints Management System (SISPAA). 

A public complaints counter is also available on Level 22 of the KPKT headquarters to assist individuals wishing to report issues related to licensed moneylending companies.

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