The Financial Services and the Treasury Bureau has commenced a public consultation on enhancing the regulation of licensed moneylenders in a bid to address the issue of excessive borrowing and better protect public interest.
The consultation paper sets out key features of various proposed measures, including enhancing regulation of unsecured personal loans, strengthening protection for loan referees, optimizing and improving the affordability assessment on borrowers in respect of unsecured personal loans, strengthening the complaint handling process, stepping up publicity and education and enhancing the regulatory regime of money lenders, according to a statement on Monday.
It proposes to set an aggregate cap on unsecured personal loans, based on the borrower’s monthly income: a cap of one month’s income for borrowers with a monthly income of HK$5,000 or less, and two months’ salary for those earning more than HK$5,000 but under HK$10,000.
It also plans to introduce a debt servicing ratio based on borrowers’ income, as well as to limit the repayment periods to not exceed the remaining term of the borrowers’ employment contracts.
The public consultation period will end on August 22.
STAFF REPORTER
