THE Housing and Local Government Ministry (KPKT) has issued a stern reminder to the public to avoid borrowing from illegal moneylenders, following a suspected arson attack on three terrace houses in Taman Tasek Gelugor Utama, Penang, allegedly linked to unlicensed lenders.
Minister Nga Kor Ming said those in need of financial assistance should instead seek loans from licensed moneylenders registered under the Moneylenders Act 1951 (Act 400), which protects borrowers through regulated interest limits.
“Under the Act, interest rates for unsecured loans must not exceed 18 percent per annum, and for secured loans, not more than 12 percent. Moneylenders are also prohibited from charging interest that exceeds the principal amount,” he said in a statement today.
Nga cited Section 29(B) of the Act, which strictly prohibits licensed moneylenders or their agents from visiting borrowers’ homes or places of employment for the purpose of collecting repayments, including through intimidation.
“In the event of any breach of this provision, the public is urged to immediately lodge a report with KPKT or the police so that appropriate action can be taken,” he added.
To avoid falling victim to illegal lenders, Nga advised the public to verify licensed moneylenders through the i-Kredikom mobile application or by contacting the ministry directly.
KPKT, he said, views illegal lending activities — often associated with loan sharks — as a serious threat to public welfare, especially as they prey on vulnerable individuals from low-income backgrounds.
“Loan sharks or illegal moneylenders often take advantage of financially desperate individuals, trapping them in violent debt cycles through excessive interest rates, harassment and threats,” said Nga.
He further called on the police to take firm and comprehensive action to dismantle such operations down to their roots. - June 28, 2025
