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Invitation for Proposals to Pilot New Business Models for Moneylending

Posted in Press releases

1          The Ministry of Law (MinLaw) today issued an invitation for proposals to pilot new business models for moneylending. The objective of the Pilot is to better protect borrowers through business-led improvements in the moneylending industry.


2          Interested participants can submit proposals on how they intend to conduct their new moneylending business models in Singapore with reference to the conditions laid out in the Invitation at Annex A, and in the specified form at Annex B. The deadline for the submission of proposals for the Pilot is 20 July 2018.


3          All pilot proposals must fulfil specific criteria which impose higher standards over and above the current legal requirements for licensed moneylenders. These mandatory criteria relate to:

a.    applicant profile;

b.    soundness and completeness of business model;

c.    participation in debt assistance schemes;

d.    customer acquisition and communication strategy; and

e.    professional debt recovery practices.


Applicants must have paid-up capital of at least $1 million, to ensure that they are of sufficient financial standing. Applicants must also have a demonstrated track record in providing consumer credit, whether in licensed moneylending or in other sectors of consumer credit. In addition, all pilot proposals must be in compliance with all relevant laws that apply to licensed moneylenders, including the Moneylenders Act and Rules.


4          Under this Pilot, business proposals that meet the mandatory criteria will be assessed based on the proposed effective cost of credit and credit policies, which include the criteria for assessing the credit-worthiness of each applicant, the criteria for deciding the quantum of credit that should be granted, procedures for processing and approving loan applications, and policies on the identification and management of problem loans and defaults. Favourable consideration will be given to applicants with credit policies that rely on objective and/or quantitative evidence to ensure that each loan is sustainable. Additional measures to ensure the health and sustainability of each loan, such as credit monitoring practices, will also be duly recognised.


5          Each successful applicant may be granted approval to implement its proposed business models in up to four locations for up to two years. Existing moneylending licensees may submit proposals under this pilot. If selected, they will be subjected to the higher standards stipulated in their proposal.  


6          MinLaw plans to issue moneylending licenses for up to 16 outlets for the implementation of new business models under this pilot. This is less than 10% of the 164 outlets currently operated by licensed moneylenders. The Ministry will do a one-time lifting of the moratorium on the issuance of new moneylending licences. The moratorium was imposed in 2012, when there were 209 moneylending licensees. The number of licensees has since fallen by 24% to 159.      


7          The validity of the pilot licence is expected to begin in 2019 and conclude in 2020, following which MinLaw will evaluate the results of the pilot and consider options for refining the moneylending regulatory regime.


For more details, please go to 


Last updated on 12 May 2018