Money lending is a path full of doubts, you need to be careful while indulging in it. If one wants to borrow, they must have the purpose to do it. As you know nothing is there for without reason. Then in money matters, an appropriate reason must be there. One can approach licensed financial institutions such as commercial banks which are being licensed and safe to contact. You can also go for co-operatives, that are regulated under the supervision of Suruhanjaya Koperasi Malaysia (SKM) which is an agency under the Kementerian Perdagangan Dalam Negeri Koperasi Dan Kepenggunaan (KPDNKK). There are licensed moneylenders available too, they offer loans to the public. They don’t accept the deposits, and they have generally sky-touching interest rates. Well you know if there’s positive then negative too! Yes, there are unlicensed money lenders too, they are famed as loan sharks, as they run illegal operations. pinjaman wang berlesen yang selamat
Can individuals do a money lending business?
The question which has popped in many minds, before knowing this, let’s get through a case of money lending. There was an insurance agent who had taken a loan of RM3,000 and had done the full payment. But, unfortunately, the ah long or you can say land leech demanded them RM1,500 because of late payment and they threatened the borrowers that he and his family could get harmed. This condition may seem filmy to you, but it’s a sad reality. It has created chaos in the people, a plethora of people think that money lending is Ah long. But don’t be a victim and stop falling prey to ah long, by reading the difference between a licensed money lender with an ah long.
Licensed money lending and Ah long.
It has prevailed that all the money lenders are land leeches or ah long, who charge high-interest rates. But this is half information only as there are legal and government-operated lenders who provide full security and guarantee to the borrowers who are also in the community.
The ministry of housing and local government (KPKT) has started an initiative for the branding of licensed who are registered. This is done to alter the thoughts of the people on the money lending process and to provide them an easy and protective loan facilities.
Let’s go through the difference between a land leech and a licensed lender, which is based on the Moneylenders Act 1951(MA).
Lintah Darat or Ah long are no one they set and break their rules, there is no license present. Anyone belonging to Malaysia can apply for a loan. There is not any limit to the amount. You can borrow an unlimited amount. There is at least a 30% of interest rate. Hidden fees are there which they demand slowly. The agreement is done orally, or verbally as there is no formal documentation present. They keep people’s personal documents such as ID, passport, bank ATM cards as a means of security deposit.
Licensed money lenders: They follow the money lenders Act of 1951. It is regulated by the Ministry of Housing and Local Government (KPKT). According to the protocols they have to renew their license every two years. Only Government servants, private employees, and self-employed individuals can apply. And they must have their income statement. The loan amount is fixed between RM1,000 to RM10,000. The interest rate is a maximum of 12% per annum and 18% per annum as it is defined in the money Lenders Act 1951.
While applying for a loan it is important to provide the complete loan details in monochrome, it should load properly checked by the applicant before stepping their feet into the loan contract.
The steps to be safe from fraudsters.
- Before lending money one must check the SSM number of the money lending company on the KPKT website.
- Don’t forget to check their license and from where it is issued by KPKT or BNM. Don’t go for the BNM one.
- Check that the loan arrangements offered by the lenders are matching with the money lenders act of 1951, especially the interest rate, whether it is exceeding 18% or not.
The victims of land leeches are individuals who were desperate people who needed more money by a shortcut way, they fall prey to their sweet words and jaw-dropping promises and benefits they provide. While we respect your decision of personal loan don’t forget to opt for a legitimate money lender.
It is known that the money lending process from the bank is way too long but trust us, you won’t ever regret taking a loan from trusted and authorized institution.