The new measure recently introduced by the Registry of Moneylenders in Singapore, could limit the channels that low income earners, whose bandwith was widen to those earning less than $30,000 p.a from less than $20,000 p.a previously. can go to for a loan in Singapore.
New measures made it mandatory for licensed moneylenders in Singapore to quote those looking to take a loan in Singapore fro them, the effective interest rate of the loan rather than the nominal interest rate. With such a measure, a licensed moneylender can only charge a loan in Singapore for those earning less than $30,000 p.a, $15 interest for every $1000 lent, a margin that would not sustain a moneylender business.
Licensed moneylenders in Singapore can also only freely set interest rate for borrowers who earn more than $30,000 a year, but faced an challenging task of trying to compete with banks in Singapore, whose traditonal customers looking for loan in Singapore are in that income bracket.
Banks usually charge lower interest rates than moneylenders due to the scale of their business, and thus can have first pick of borrowers looking to take a loan in Singapore.
The fact that licensed moneylenders in Singapore will not be allowed to charge borrowers looking to take a loan in Singapore, a fee for accepting or renewing loan applications is also high controversial as banks are imposing similiar charges.
All these measures could make the licensed moneylending business a unprofitable one, with the high bad debts cost, and will see the smaller players quitting altogether.