The Financial Services & the Treasury Bureau today published conclusions from a public consultation on enhanced regulation of licensed money lenders, along with specific planned measures, with a view to implementing first-phase measures as early as August.

Scheduled for implementation in two phases, the measures are intended to address the issue of excessive borrowing and better protect the public.

The bureau outlined that the first-phase measures are mainly focused on introducing debt servicing ratio caps for unsecured personal loans to low-income earners, prohibiting money lenders from requesting borrowers to provide loan referees, and requiring money lenders to include a risk warning statement specified by the Companies Registry (CR) in their lending advertisements.

Measures relating to the “Credit Data Smart” operating model will be rolled out in June next year under the second phase.

The bureau and the CR are drafting revised licensing conditions and administrative guidelines for money lenders and have held discussions with the Judiciary on updating existing licences in phases to dovetail with the measures’ implementation.

With a view to enhancing the regulation of money lenders, the bureau conducted a public consultation from June to August last year. A total of 150 submissions were received from the community.

The bureau also briefed the Legislative Council’s Panel on Financial Affairs (LegCo FA panel) and organised briefing sessions for the money-lending industry, professional bodies and non-governmental organisations.

The bureau stressed the Government is committed to strengthening the regulation of money lenders to protect the public interest. It said it is pleased to note that the community supports such regulation and agrees on the need for targeted measures to address the issue of excessive borrowing. It added that respondents generally supported the major measures put forward by the Government and provided valuable comments on specific details.

The bureau will brief the LegCo FA panel next month on the consultation conclusions and the details of the various measures.