This article mainly introduces the basic situation of Hong Kong’s money lending industry，

want：The money lending industry has a long history in Hong Kong。This article mainly introduces the basic situation of Hong Kong’s money lending industry，The main contents of the "Money Lenders Ordinance" as a separate legislation and the "Code of Practice for Money Lenders" formulated by the Hong Kong Licensed Money Lenders Association，and conducted on-site inspections of two money lending institutions.，Summarizes the characteristics of its operation，On this basis, several enlightenments are put forward:、The money lending industry has a long history in Hong Kong。

According to the definition of Hong Kong’s Money Lenders Ordinance，"Money lender" means any person who carries on the business of money lending or advertises or claims or in any way represents that he is engaged in such business。

As of the end of November 2010，There are 624 licensed money lenders in Hong Kong，154 companies applied for license renewal，32 companies are applying for licenses，2106 licenses expired，94 applications were rejected，214 Hong Kong money lenders withdrew their applications and do not accept deposits from the public，Only engaged in money lending business，Mainly include：(1)personal and business credit；(2)mortgage；(3)car、office equipment、heavy machinery、Factory leasing；(4)Credit card financing、promissory note discount；(5)Small and medium enterprise loans；(6)mortgage loan；(7)Syndicated lending, etc. 2、Hong Kong's special legislation for professional money lending institutions, the "Money Lenders Ordinance", was promulgated in December 1980 by the "Money Lenders Ordinance" in Hong Kong.，divided into 5 parts，36strip。

1. Part one：able、Confidentiality, etc.。
2. part two：Restrictions on carrying on business as a moneylender、License application、License validity period、License revocation and suspension、License transfer。
3. part three：moneylender's deal，including agreement form、Money lender’s duty to provide information to borrowers、Money lender’s duty to provide information to guarantor、Borrower repays early、Illegal agreements, etc.。
4. Part 4：Prohibition on excessive interest rates；
5. Part 5：Restrictions on money lending advertising、Registrar and police investigative powers、Penalties and Disqualifications、Burden of proof, etc.
6. A license is required to operate money lending business in Hong Kong，Lending to unspecified majority in Hong Kong without any relationship with the Hong Kong Monetary Authority，Need a license。

In accordance with the provisions of the Regulations，Anyone operating a money lending business in Hong Kong must obtain a money lender's license，License management is at the Government Companies Registry。Because money lending is a special industry，So the registration office will go to the police station (police station) to check the background.，The police play a decisive role in issuance of license plates。The license is valid for 12 months，The license must be renewed when it expires。

The Money Lenders Ordinance stipulates，Unlicensed money lending business，will be fined and imprisoned，Lending by unlicensed moneylenders is not protected by law (2) Interest rate restrictions on a two-tier structure：Interest rates less than 48% are legal，More than 60% is illegal，48%60%The Money Lenders Ordinance stipulates，with certain exceptions，The annual interest rate on loans by any person (whether a licensed moneylender or not) shall not exceed 60%，It is illegal if the interest rate is less than 60% and greater than 48%, it is not necessarily legal.，It depends on the judge's judgment。

Judges have discretion in this range，Therefore, in order to avoid getting into lawsuits, Hong Kong’s commercial banks and money lenders，The loan interest rates are all below 48%. The two-tier interest rate structure (48% and 60%) that prohibits lending at excessively high interest rates was determined with reference to Hong Kong’s business practices at the time and the laws of other countries (such as the United Kingdom).

1. Any advertisement of a money lending institution must display the name of the money lender specified in the license，Must state the annual interest rate proposed to be charged。
2. Registrar or police officer of the rank of Superintendent and above，Reasonable suspicion that a moneylender has committed an offense specified in the Ordinance，may enter the moneylender's place of business，

Require

Present and inspect the money lender’s license、accounts、Documents and other relevant information "Western Finance" 2012 No. 6 (5) Improper Debt Collection，A recent example is，2009Year，Some members reported that some foreign domestic helpers left Hong Kong after borrowing money from money lenders.，Moneylenders often cause nuisance to former employers of domestic helpers in collecting outstanding debts。

There are also debt collection agencies that post personal information about relatives in public places in order to collect debts.。

Relevant officials pointed out in 2010，Money lenders provide personal information to debt collection agencies，This does not relieve the moneylender from his liability as principal，It is necessary to ensure that the debt collection agencies it employs comply with the regulations. The Hong Kong government is very concerned about the harassment caused by bad debt collection practices to the public.，Through measures such as strengthening law enforcement and close supervision of debt collection practices by various regulatory agencies，Actively prevent and combat such behavior，The number of related reports dropped from 20,610 cases in 2005 to 18,203 cases in 2009，20102009There is also a downward trend year-on-year. In addition,，Some MPs have also received complaints，Reflects that some moneylenders are too lenient in approving loans，Large loans to teenagers with no income or credit history，Members believe this has a negative impact on the growth of young people，And their parents are likely to eventually have to repay the three-year loan on their behalf.、Self-regulatory organizations and self-regulatory rules：Hong Kong Licensed Money Lenders Association and its Code of Practice for Money Lenders (1) Self-regulatory organization：The Association is the trade association for the money lending industry in Hong Kong.，Founded in December 1999，More than 30 members。

Guild Responsibilities：

1. Safeguard and protect the overall interests of licensed money lenders，Develop industry business operating codes；
2. Encourage mutual exchange and cooperation among fellow moneylenders，Improve and promote business ethics and self-discipline among moneylenders；
3. Lobby the government and relevant agencies on money lending industry matters under existing laws and the Money Lenders Ordinance、consultation，The goal is to strive to become a credible and influential、authoritative representative and advisory bodies，Improving the social status of the moneylending industry Why do guilds have so few members?，Industry insiders pointed out：This is because many money lending companies have unclear backgrounds.，So the guild’s censorship is very strict，Only companies with clear backgrounds，to become a member
4. Self-regulatory rules "Code of Operations for Money Lenders" Code of Operations for Money Lenders：2002Year，The Hong Kong Licensed Money Lenders Association issues self-regulatory business operation guidelines
5. Emphasis on protecting consumer rights。
6. Protect borrowers’ right to know the terms of service。
7. Protect the privacy of customer data。
8. equal credit opportunities，Customers with disabilities should not be discriminated against，Don’t just rely on family status(For example, single parent)、sexual orientation、Discriminate against customers on the basis of age or race

Require

Clarify the content of credit assessment，Ensure loan applicants understand the key terms of the loan contract。

1. estimate、After examining the applicant’s repayment ability，before a loan or overdraft can be approved。
2. The interest rate at which a moneylender should offer a loan to a customer，Will the interest rate change during the loan term?，Establish a basis for interest，If necessary, the annual interest rate and the number of days in each year (including leap years and non-leap years) used for calculation should be included.
3. Restrictions on the conduct of debt collection agencies hired by moneylenders。
4. Money lenders should establish a formal contractual relationship with the debt collection agency they hire.。

(2 The money lender should make it clear in the contract or in writing，Debt collection companies are in the process of collecting debts，Do not threaten or use violence, either verbally or physically, against anyone。Money lenders should stipulate that debt collection agencies shall not use harassing or unfair debt collection methods IV、1、Most of the loans are personal credit loans。

From the perspective of guarantee，Unsecured credit loans accounted for 75% of the two money lending institutions surveyed，Loans account for 25%，The collateral is basically real estate，Current equipment and other movable assets are mortgaged and pledged，Lending institutions do not accept loan recipients，80%of loans were given to individuals，from ordinary people，to the doctor、lawyer、There are senior government officials，Regardless of the purpose of the loan, 20% of the loans are given to enterprises，Mainly working capital loans。

In comparison，The two lenders surveyed are wholly-owned loan companies in the Mainland.，90%of loans are given to SMEs 2、loan term、Interest rate and single loan amount：Different money lending institutions are different。Two moneylenders offer loans with a one-year term，Maximum term is 20 years。The shortest one is more than 10 days、1The monthly loan interest rate depends on the rating of the applicant.，The highest interest rate is 48%，Minimum interest rate guaranteed 3%，12% unsecured。

Money lending agency reflects，Competition is driving interest rates down and moneylenders are not allowed to charge fees，But in fact, some people also charge it in disguised form。all

cost

，calculated as part of the interest rate，The interest rate does not exceed 48%。One of the money lending institutions surveyed only lends to individuals in Hong Kong.，No guarantee or mortgage，The maximum amount is 300,000，All credit loans，The loan rejection rate is 50% (no loans to enterprises)，And its lending companies in the mainland，Mainly lending to businesses，But leave it to the individual business owner)。

Credit loan from another moneylender up to 1 million，Those with mortgages can get more than 10 million3、The ROE of the two leading lending institutions is about 20%，NPL is not high，Asset quality fluctuates with the economic cycle。The ROE of the two companies surveyed is about 20%。Better lending institutions have lower NPL ratios，Student loans have lowest NPL ratio。

To collect loans, professional collection companies are generally hired.，The collection company’s share ratio：Open at 28 or 37. "Western Finance" In 2012, the 6th person fell into a debt crisis and could refinance.。At this point the money lending institution negotiates with all creditors，Interest rates cut，loan extension。

Of course, an individual can also declare bankruptcy，Hong Kong personal reopens after 4 years of bankruptcy，Japan、In the United States, transfers of good or bad assets rarely occur in the past 7 years.，But due to competition，Some money lending companies often poach customers in front of other money lending companies.，The method is to help the customer repay the loan and then re-issue the loan to the customer at a lower interest rate4、High efficiency is the competition of money lending institutions

Advantages

，Loans can be disbursed within half an hour at the fastest，But it does not overlap with the commercial banking market，head-on competition。

Money lending institutions are very efficient in lending，The internal personal rating system takes a long time to accumulate，Plus a mature external credit reporting system，It can disburse personal loans within half an hour。One of the leading money lenders has acquired more new customers in recent years than commercial banks have acquired.。

Money lending institutions believe，They don't compete with banks，Because the customers are all customers that the bank does not want. Objectively speaking,，Banks have also created some market space for lending institutions，for example，Hong Kong bank credit card debt interest rate is over 30%，47%(Compare，The current mortgage loan interest rate is 2%)，In view of this situation，Lending institutions expand a business，lending money，Pay off credit card debts for cardholders. Monthly repayment balance. Total interest expense: HK$570,000, HK$27,822, HK$794, 104,294, HK$570,000+HK$100,000, a decrease of 46%, a decrease of 81%, a decrease of HK$246, 485、Government supervision and management：basically laissez-faire，The premise is that the money lending institution does not violate the Money Lenders Ordinance。

The Money Lenders Ordinance stipulates：The police have entered the moneylender's business premises、Right to inspect books, etc.，But under investigation，Two of the largest moneylenders consider Hong Kong a free economy，Everyone operates freely in accordance with the law，The registry and police have not checked。

License renewed annually，Reasons why police denied moneylender license：Many complaints、Having committed illegal acts in the past two years，The government convened a meeting with representatives of money lending institutions，Discuss the money lending market，This is also promoted by lending institutions6、Due to the diverse sources of funds (RMB bonds、listing, etc.)，Accurate market positioning，Lower regulatory burden，None of the institutions have plans to convert into commercial banks。Hong Kong money lending institutions have diverse funding sources，There are no plans to convert to a commercial bank。

Hong Kong money lender financing channels include：

1. Own funds；
2. Listed；
3. Bond issuance (April 2011，One of the money lending companies we researched issued a 3-year、4%500 million yuan bond)；
4. Syndicated loan (a money lending company investigated raised about HKD 3 billion through syndicated loan，interest rate
5. 25%，Belongs to credit loan) etc.。

When a bank grants credit to a lending institution,Some do not require mortgage guarantee，Some need it because the source of funds is guaranteed.，Light regulatory burden，Therefore, neither of these two companies have plans to become commercial banks.。Even due to higher capital returns，New shareholders want to come in，Old shareholders all refused7、Actively expand the mainland market。

The money lending institutions investigated are already in Shenyang、Chongqing、Tianjin、Chengdu、Kunming、Dalian、company，One of them had a 123% year-on-year increase in loan balance in the Mainland in 2010.、(1) For those who do not accept deposits from the public、Systemic risks generally do not occur、Non-deposit-taking money lenders that will not force public resources (such as applying for re-loans from the central bank as the lender of last resort) to bail out，No need for prudential regulation。

Free trade according to law，Loss at your own risk

1. Non-prudential supervision does not mean ignoring，middle、We will speed up the promulgation of laws and regulations related to money lenders in my country in the future.，Lending to an unspecified majority，Must apply for a license，Operate in accordance with the law。Can be studied when making legislation：
2. Is it necessary to make it illegal for interest rates to be above a certain level?
3. Regulate all important links in the money lending industry chain：such as debt collection、Advertising behavior, etc.

About Hong Kong Xintong

Hong Kong Xintong focuses onHong Kong Securities and Futures Commission license、Hong Kong Insurance Broker License、Hong Kong MSO Licenseandmoneylenders licenseApply for service，Assist customers to applyUS MSB license、NFA、RIA、Canadian MSB license、Mainstream overseas financial licenses such as Australia and Mexico，Support enterprises to achieve compliance expansion of cross-border financial business。Also availableCayman Islands Offshore Company Registration、Offshore fund establishment and global compliance operations and other services，Help enterprises expand their presence in international markets。Provide one-stop compliance solutions for enterprises。To learn more，Please contactHong Kong Information Communications Consultant。