Money Lenders Act 1951 here

Act adopted on May 1 but enforcement officially began yesterday with briefing for 100 money lenders

The ‘along’ or illegal money lenders will not have it easy in the days ahead now that the Money Lenders Act 1951 has been extended to Sarawak.

Consequently, all money lending activities are now governed by the Act.

Its enforcement was officially launched yesterday by Second Finance Minister Dato Sri Wong Soon Koh during a briefing at the Kuching City South Council auditorium for more than 100 money lenders.

Wong said with the extension of the Money Lenders Act 1951 to the state, the High Court would no longer handle, administer, manage and issue money lenders licence.

“Previously, the activities of money lenders in Sarawak were governed by the Sarawak Money Lenders Ordinance 1912 (Chapter 114).

“Back then, the management and administration (of money lending) was handled by High Courts in Kuching, Sibu and Miri and the revenue collected belongs to the federal government,” he explained.

Wong, who is also Urban Development and Tourism Minister, disclosed that the state government had in 2003 requested for the Act to be extended to Sarawak given that the century-old ordinance (Sarawak Money Lenders Ordinance 1912) was obsolete.

To implement the Act, he said state officers namely the State Secretary and 11 Residents of the respective divisions had been appointed as “Deputy Registrar” of money lenders.

“The reason why Residents are appointed as Deputy Registrars is because they are the heads of every division and they can monitor better on the ground,” Wong said.

He added that 72 council enforcement officers were appointed as inspectorate of money lenders and these inspectorates were among the existing council enforcement officers who would be able to perform their duties well given their familiarity with enforcement duties on the ground.

With the appointment of officers from the existing administrative institution, he said the state government need not recruit any new officers to handle the money lending activities.

“Thus, there is no financial implication involved,” he said, adding that there were 310 licensed money lenders throughout the state.

Wong appealed to those involved in the money lending business to conduct their activities according to the Act as part of the efforts to eradicate the problems arising from illegal money lenders.

“It is hoped that all money lenders will give full cooperation and abide by the existing law so that the business will prosper and everyone involved will benefit,” Wong said.

When asked by reporters later if the ‘along’ problem was serious in the state, Wong replied: “I suppose it is quite serious to a certain extent.”

He, however, hoped that the extension of the Act would help regularise all the money lenders so as to better enlighten Sarawakians on the proper channel to get loans.
“We will make it (the Extension of the Money Lenders Act 1951) better known for the people who would like to borrow some money.

“They should borrow the money from the properly licensed money lenders,” he said.
He said ‘along’ activities could certainly be minimised if people only borrow from licensed money lenders.

“In the past, perhaps some of them may not know who the money lenders are but now with the 11 residents appointed as the Deputy Registrars of these money lenders, those who want to borrow money should go to these people.

“It is safer for people to approach licensed money lenders rather than (going for) exorbitant interest rates charged by the illegal money lenders,” he said, hoping that the 11 Residents would fulfil their roles as expected.

Asked if those illegal money lenders were encouraged to register, he said they should do so if they could meet the basic requirements of the application for licences and permits.

He, however, pointed out that it was not easy since the Act stated that all applicants must have a paid up capital of RM1 million and they must pay a fee of RM2,000 for two years in order to apply for a new licence.

(Under the old legislation, an applicant needs only to pay RM50 for a licence).
On the interest rate charged by the legal money lenders, Wong said: “I really don’t know but there are guidelines as to what sort of interest they should charge and this is within the regulation.”

Meanwhile, of the 310 licensed money lenders, Sibu tops the list with 97 operators while Miri (92), Kuching (79), Bintulu (25), Limbang (14) and Sri Aman (3).
Under the Extension of the Money Lenders Act 1951, all fees collected will be deposited as state revenue.

Officers and representatives of Bank Negara and the Association of Licensed Money Lenders Malaysia gave the briefing which was divided into several sessions.