Moneylenders Credit Bureau (MLCB) launched on 1 March 2016

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On 24 February 2016, Ministry of Law (MinLaw) issued a press release announcing that the Moneylenders Credit Bureau (MLCB) will be launched on 1 March 2016. This initiative was first introduced in 2014 as part of a set of more stringent rules to regulate licensed moneylending in Singapore.

MLCB is a central depository containing information about all loans granted by licensed moneylender to the borrower as well as borrower’s repayment records. The aim of the new credit bureau is to provide protection for both the borrowers and the moneylenders.

From 1 March 2016 onwards, all licensed moneylenders are required to provide updated information about loans they have granted and individual borrower’s repayment behavior to the bureau. The above information will then be used to generate credit reports on each borrower.

The credit report can be purchased by both borrower and licensed moneylender at $1 and $0.50 per report respectively. It will include information on:

  • Loan Type, Loan Tenure, Total Outstanding Principal Amount and Total Amount Payable.
  • Details of all Active Loans with Licensed Moneylenders and Repayment Status of each Loan.

In the past, an individual may approach different moneylenders to take out multiple loans and the moneylenders have no access to information on whether the borrower is overstretched and if they can afford repayment. MLCB provided a solution to this situation.

With the credit report, not only can the borrower keep track of and better manage their own loans, licensed moneylenders can use it to assess the creditworthiness of the borrower and make an informed decision when reviewing the credit application. This can help borrowers refrain from excessive borrowing beyond their means and help licensed moneylenders to lower the default rate and hence, the cost of doing business.

DP Information Group (DP Info) is the company appointed to design, develop and manage the operations of MLCB. They currently operate 2 other credit bureaus – DP Credit Bureau and DP SME Commercial Credit Bureau.

According to DP Info spokesman “Borrowers can also rest assured that information submitted to the MLCB will not be made available to other entities besides licensed moneylenders unless explicit approval has been obtained from MinLaw.”

With MLCB established, MinLaw and Registry of Moneylenders will also use the information to better monitor borrowing and lending activities.

As it appears, moneylenders may be legally required to use the MLCB – whether they want to or not. A spokesman for MinLaw said that they will “monitor the situation for some time” to ensure it runs smoothly, before mandating the use of the bureau for all loan applications.

“Legislative changes will be required to effect this”, said the spokesman.

“Licensed moneylenders are strongly encouraged to use the bureau to conduct credit checks on borrowers as part of responsible lending, they have an incentive to do so, to minimize default.”

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