Money Lenders
Under the Money Lenders Ordinance, anyone wishing to carry on
business as a money lender must apply to a licensing court for a licence.
The ordinance does not apply to institutions authorised under the Banking
Ordinance.
Licence applications are, initially, submitted to the Registrar of Companies
as Registrar of Money Lenders. A copy is also sent to the Commissioner
of Police who may object to the application. The application is advertised
and any member of the public who has an interest in the matter also has
the right to object. During the year, 1 179 applications were received and
1 250 licences were granted. At the end of 1997, there were 1 138
licensed money lenders.
The ordinance provides severe penalties for statutory offences such as
carrying on an unlicensed money-lending business. It also provides that
any loan made by an unlicensed money lender shall not be recoverable by
court action. With certain exceptions (primarily authorised institutions
under the Banking Ordinance) any person, whether a licensed money
lender or not, who lends or offers to lend money at an interest rate
exceeding 60 per cent per annum commits an offence. Any agreement for
the repayment of any such loan, or security given in respect of such loan
is unenforceable.
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