AKTA :MONEYLENDERS ACT 1951( ACT 400) & REGULATIONS 10TH OCTOBER 2025 - ILBS

Malaysian law, known as the Moneylenders Act 1951 (Act 400), governs the nation's moneylending industry. According to the Act, a moneylender is someone who engages in the business of lending money, regardless of whether they also operate another business.

According to the Act, anyone wishing to operate a moneylending business must apply for a licence with the Minister of Housing and Local Government. On application, the licence might be renewed for another year.

The maximum interest rates that moneylenders may charge are also outlined in the Act. The maximum annual interest rate for secured loans is 12%, while the maximum annual interest rate for unsecured loans is 18%. Additionally, lenders are not allowed to impose any costs above those outlined by the Act.

In addition to the Act, there are rules that offer more information on how the Act is being put into practice. The regulations include topics such as how to apply for and renew a moneylending licence, what is required to advertise and display a licence, and how to be prosecuted for Act violations.

According to the Act, it is illegal for anybody to operate a moneylending business without a licence or to charge interest rates or fees that are higher than those that the Act specifies. Infractions are punishable by fines, imprisonment, or both.

Notably, requirements on responsible lending practices and consumer protection measures were added to the Moneylenders Act 1951 in 2011. These changes are meant to safeguard borrowers from unethical activities and guarantee that moneylenders operate in a fair and open manner.