SEANET Perspective No 9 – Market-Based Approach for Moneylending in Malaysia

Moneylending
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A lack of access to financial markets is a common challenge faced by the poor across ASEAN  countries. Without access to traditional lines of credit or banking, the poor and undocumented  often rely on informal means to manage their money. Moneylending is a form of informal financing  that has played an important role in facilitating private sector growth and the livelihood of  communities that fall beyond the reach of the formal financial system.

There is much confusion among the public in Malaysia between licensed money lending and  loan sharking, negatively tainting the reputation of licensed moneylenders. In addition, some  think that licensed moneylenders have the same business model and operate exactly like a  bank. To deal with these issues and other misconceptions faced by the industry, a heavy handed  enforcement approach has been adopted by the government. These efforts empower the police  and authorities with increasing powers, and has resulted in unintended consequences that choke  the operations of licensed moneylenders.

 

2017-06-09T07:30:48+00:00 10th March 2017|Seanet perspective|Comments Off on SEANET Perspective No 9 – Market-Based Approach for Moneylending in Malaysia