Hong Kong's Law Scrutiny: An Examination of Lenient Approach Towards Predatory Lending and Debtor Harassment Practices
In the heart of Asia's world city, Hong Kong, a growing concern surrounds the practices of licensed moneylenders. Despite the Money Lenders Ordinance, which caps interest rates at 48% per annum, experts and lawmakers argue that this ceiling is too high, and calls to reduce it to 36% are gaining momentum to better protect borrowers from extortionate rates [1][5].
Recently, the government initiated a public consultation (June to August 2025) on a package of proposed regulatory measures aimed at enhancing oversight of licensed moneylenders. These proposals include strengthening borrower assessment requirements for unsecured personal loans, enhancing protection for loan consultants, and improving complaint handling and the regulatory system [2][3].
However, critics argue that these reforms do not fully address the predatory network behind illegal lending and debt collection activities. Harassment of debtors and their referees remains widespread, and current laws are ineffective in curbing abusive collection tactics [3][5].
Suggestions to strengthen regulation include establishing a minimum capital requirement for licensed moneylenders, learning from Singapore's regulatory framework, which imposes hard borrowing limits based on income, mandates use of a central credit bureau, and criminalizes debt harassment outside prescribed hours [1].
The issue is particularly significant for vulnerable individuals, unfamiliar with local lending practices, who are susceptible to debt traps created by high interest rates [4]. The mindset towards these practices must change, as what is wrong is wrong, regardless of the lender's demeanor.
Many borrowers are willing to repay loans if terms are fair and collection methods are lawful. However, the current system does not provide adequate protection for borrowers from exploitative practices by licensed moneylenders in Hong Kong. The weakness of enforcement against illegal practices is a concern, and the Money Lenders Ordinance is outdated and inadequate for addressing current predatory practices [1][2][3][5].
The article accepts letters to the editor via email at letters@our website and Google form. Submissions must include the writer's full name, address, and phone number for verification. It is crucial that society and authorities address this issue to ensure fair and ethical lending practices in Hong Kong.
- The ongoing issue of predatory lending practices in Hong Kong's economy is a significant concern, especially for vulnerable individuals who may fall into debt traps due to high interest rates.
- Experts and lawmakers are urging the reduction of the interest rate ceiling for licensed moneylenders from 48% to 36% to better protect borrowers from extortionate rates.
- To strengthen regulations, suggestions include imposing a minimum capital requirement, adopting Singapore's regulatory framework, and focusing on tackling the predatory network behind illegal lending and debt collection activities by licensed moneylenders in Hong Kong.
