Here's a little trivia for you. Which Ministry is in-charge of these "licensed money lenders"? Well, if you are "new" to Malaysian politics, it's not the Ministry of Finance, where it logically should be. After all, logic is not what is the strength of our Government's administration (e.g., 13 agencies under different ministries takes care of public transportation).
What is possibly most surprising when I discovered this fact about 2 years ago is that money lenders are actually licensed by Ministry of Housing and Local Government. Yes, you heard (read) me right. How on earth is money lending activities related to this Ministry, you are likely to ask. Well, to understand the above, you'll probably need to understand the background to the Barisan Nasional administration, that is the Housing & Local Government ministry has always been the domain of component party, Malaysia Chinese Association (MCA). So you can further infer the connection between the political party and the business the Ministry is tasked to "regulate".
Well, out of curiosity of what the official answer from the Ministry is going to be, I asked the Prime Minister the following question:
...[apakah] sebab kuasa perlesenan syarikat pinjaman wang berada dalam Kementerian Perumahan dan Kerajaan tempatan dan bukannya satu fungsi Kementerian Kewangan yang lebih berpengaruh dan berkepakaran dalam bidang kewangan.The reply from the Prime Minister's office is as follows:
Untuk makluman Ahli Yang Berhormat, perniagaan pinjaman wang dan pajak gadai merupakan peninggalan (atau legasi) dari sistem pentadbiran terdahulu.Make what you will with the reply above. I found the argument that a money lenders' license is unconnected with the country's credit system just plain ignorant or even ludicrous , or even the fact that these licensees need to agree before a change in ministerial responsibilities is effected.
Peniagaan ini tidak diletakkan di bawah kawal selia Kementerian Kewangan ataupun Bank Negara Malaysia (BNM) kerana syarikat-syarikat yang menjalankan perniagaan tersebut tidak dibenarkan mengambil deposit dari para pelanggan. Untuk menjalankan perniagaan, syarikat-syarikat yang dilesenkan perlu mempunyai modal sendiri yang mencukupi untuk memberikan pinjaman. Oleh yang demikian, syarikat-syarikat yang menjalankan perniagaan pinjaman wang dan pajak gadai tidak terdedah kepada ancaman kewangan yang boleh menyebabkan "economic risk" (dengan izin) atau ketidakstabilan kewangan, seperti yang terdapat pada bank-bank dan institusi kewangan komersil.
Sekiranya terdapat cadang untuk memindahkan kuasa kawal selia syarikat-syarikat yang menjalankan perniagaan pinjaman wang dan pajak gadai ke Kementerian Kewangan, satu kajian yang menyeluruh perlu dilaksanakan oleh Kerajaan sebelum sebarang keputusan diambil. Ini adalah kerana satu persetujuan perlu dicapai oleh pihak kementerian dan syarikat-syarikat tersubut mengenai tatacara pengurusan risiko kredit (credit risk manangement practice) yang dipraktikkan.
26 comments:
Do we want to move the jurisdiction of these 'ah longs' business to Ministry of Finance? I dont think MOF can handle it. Technically, yes ah long can set up finance companies, and when they do that, they can set up branches everywhere, even in kampungs. Do we want that? I for one dont, however attractive their credit facilities are. I mean who would lend money without collateral and without checking the risk? Only ah long do. If they set up business in kampungs, they would be doing very well, especially when the Malay Muslims would pay all their debts, even if they are dead. (if a Muslim is dead leaving debts, his or her next of kins would be obliged to pay the debt).
Better at current status quo, under Local Govt, licensed only at one premise and cannot open branches everywhere.
Tony,
Licensed Money Lenders is not easy, they need to take their hard earn money to loan the borrowers, I sometime really pity them, while the borrowers come lend money what ever they can agree after lend the money, "ah long" name also forget. If the borrowers really sit down talk with them while they don't have ability to pay and re-schedule it, I think those "ah long" can accept.
But a lot of buggers, lend money don't want pay, some even "action". Then the money lenders will only use some "tactic" to recover the debts.
If we compare "ah long" with bank, of course the interest rate of "ah long" is much more higher, beside that sometime the service and flexibility of "ah long" will better than bank.
Bank will do foreclosure law-by-law, they will not listen to your excuse. But the money lenders do listen, if the borrowers really in the hard time, and willing to sit down and talk with "ah long", they are more flexible. I do agree some of the "ah long" really not ethical and give the borrowers hard time although borrowers fulfill their obligation. This we should take action against them.
In order to have a better regulation, I think Money Lenders should put under MOF. Why the money lenders license will under MHLG, that i also quite surprise, maybe in history this is under local government authority.
"Ah Long" not all bad 1, sometime they are angel for people, bank borrow money take time, they only borrow to the rich. Those bad "ah long" government should do something.
Finally, someone have spoken about this issue. I've always felt sad about the sprouting of these `licensed' Ah Longs because almost all the time, it actually only benefit one party, the Ah Longs.
Have you also noticed that these establishments are always, always at the low-rent districts in the cities i.e. the low cost flats, low cost housing area.
This is really, really bad - the back lash is going so damaging to society at large in the not too distant future, God forbid.
Tony, I have always wondered about this but didn't bother finding out. Thanks for the info.
What I do not understand is how the licensed moneylenders could circumvent the rules by charging exorbitant rates and getting away with it? I would assume they are allowed to charge only reasonable rates eg. credit card companies at say 18%pa and not at >10% pm which is the practice. It amazes me how they keep their accounts - one for official and one for unofficial without getting into trouble. The borrowers must be dumb or desperate to go along without reporting them to the relevant authorities.
If the moneylenders are keeping a low profile, then it might be difficult to detect, but some are obvious show-offs with property purchases within a few years. Next question is how did they manage to evade from the tax authorities as well? A simple check would reveal the fact that a moneylender had earnings beyond the rates he charged for a certain principal sum he started with, if he had purchased a number of properties within a short number of years.
He is likely to be guilty of charging rates higher than legally permissible, as well as under-declaring incomes from the loan-sharking business.
The PMD answered the "why not MOF"... but did not answer "why Local Government Ministry"...
The answer for "Why not" is not looking good... aren't these lenders supposed to be regulated financially? Is there any taxes imposed to them?
OK... no economic risk yadda yadda... but why Local government ministry?
Why not Home ministry, so that it could control the unlawful action taken by ah longs?
Why not, errr, Rural development or Agriculture, so that it can start a "microcredit" business?
Why not, errrrrrrrrrrrr, say, Youth and sport or community development.... for... no idea what I should cr@p about... LOL
I don't disagree a properly regulated and licensed Ah Long could be "angel" to many people... after all, Prof Muhammad Yunus won a Nobel Prize due to his idea of microcredit...
Now do you understand why it is, that everytime people face problems with AH LONGS, the victims of AH LONGS, run to MCA TO SOLVE THEIR PROBLEM, its not that MCA is actually trying to help the people, they are protecting their investments with the ah longs since it is MCA WHO GIVES OUT THE LICENCES. NOW do you all understand why the AH LONG menace will not go away, they are actually MCA MEMBERS. LOL
Ah Longs do provide good services to borrowers. The problem start when the borrowers broke the agreement. Dont blame the ah long!
Ah Longs must be crushed, once for all. They are a menace to society. Anti-Melayu, anti-Cina, you name it. Ah Longs and MCA are one. Secret societies and MCA are one. To get rid of Ah Longs, to destroy them, MCA has to be detroyed from face of the earth. To destroy MCA, one has to destroy Umno too.
'why Local Government Ministry' bags the same query as '13 agencies under different ministries takes care of public transportation'!
One simple answer - they r all created to profit the people involved within the respective ministries.
The users? They r just the pawns within the money-generating scheme.
Minister of Housing and Local Government: MCA Minister
Licienced Money Lender: Ah Long
It is not difficult to imagine how does both connect and what does it imply..
Put it plainly, Money Politics. Ah Long is MCA politicians paymaster. MCA politicians in turn will legitimate Ah Long business as exchange..
Hi Tony,
I think what needs to be done is for clear guidelines to be drawn on how these money lenders can provide their services and for more transparency on who are these licensed money lenders. The government should list on a website all the updated list of money lenders in the country and who are the owners and operatiors. If you can do this for banks and other FIs I don't see the problem with money lenders. This will ensure only licensed persons can operate this business. This will also ensure the illegal ones (who are normally associated with those using heavy handed tactics) are flushed out and will do less damage to the unfortunate borrowers.
Secondly, I think guidelines should be drawn out on how these money lenders operate. These should include standard and simplified lending contracts and there should also be a rule on how much interest/fees/charges they can charge, proper audit of their accounts etc.
Treat them like any FI and that includes a control of where they can operate and how they can advertise their services. Looking at the proliferation of banners, posters, paste ons used by these characters everywhere, a tourist will think the whole of Malaysia is in financial trouble. The Govt should not allow them to stick there posters, banners anywhere and everywhere on Govt property (telephone poles, electrical substations, road signs etc (broken window concept)as this will give the impression that the whole area is controlled by them and that perhaps even the police is working in concert with them in the very lucrative trade.
I hope you can really pursue this issue because it has become a plague that is eating up the Malaysian society and with the economic and financial crisis hitting us, this plague will become very severe indeed.
DO not support DAP already...MBSA starts to ban alchohol drink in Shah Alam...PAS is the culprit who came out with such proposal..
SUPPORT DAP=Support PAS
Tony,
The news about you "slamming" ally was out...
I don't think such a "slam" will benefit the DAP though... maybe you should have adopted a less hostile manner... Look at how... say Teresa/Eli replies over this issue as reported in Malaysiakini... ;)
Your reply gave DAP a sore outlook, that DAP doesn't care about the muslims feeling over alcohols, and focused rightly on "upholding" non-muslims' rights in obtaining alcoholic beverages... The reaction also created an image that DAP is championing ketuanan arak, instead of being more balanced in discussing the (adverse) impact of consuming alcohols, and the freedom of drinking...
I personally think that such a strong worded reaction is not needed towards an almost-petty issue... especially when the DAP wishes to forge a more multiracial outlook... or is the DAP still working hard in championing for Chinese community only?
Another group of people that may need looking into are the agents involved in remittance of overseas fund. There are lots of foreigners (particularly illegals) who have to use these agents to send money overseas. I'm not quite sure how they work, but it definitely affects our ringgit outflow.
Oh, and how about the Indian money lenders? Are they possibly MCA members too? d:
Money Lender business was illegal. Right? Why now become legal? What's the logic behind to make it legal?
If got a lot of money and don't know what to do with it, lend it out to create social problem isn't a good thing.
Hmm... wonder how to make a lot of money like Ah Long. :-)
DAP MPs and state assemblymen still do not realised they are in power today becoz the Malays voted them and now they are trying to be heroes to the chinese community only.
to the DAP dont you all are aware that alcohol are bad for health just like cigarette.
I am a chinese and i hate all the above habits.
Not all policies by PAS are bad.
in fact PAS has been urging bread earners to go back to their families after work instead of heading to all these karaokes joint where alcohol and chinadoll are in abundance.
i remember not very long ago a group of chinese housewife went to see a certain OCPD asking for help
becoz their husband have been spending all their time in all these karaokes outlet.
how many chinese families have succumbed to these evil ?
bread winner spending their hard earned money on alcohol, gambling and later on womanising will come along.
DAP remember you guys represent all malaysians and please do not try to be a hero to a certain community even though knowing very well all the above are bad for everyone.
carry on with your typical chinaman attitude and i can guarantee you guys will all be a one term MP/state assemblyman.
P/S read LIM KIT SIANG BLOG.
BTW NONE DAP MPs has responded.
ask your wife's comment about alcohol and may god protect your children from the evil of alcohol.
Let us be rational over the issue of the whole alcohol thing. As stated above alcohol is the source of many social and health problems and broken homes and fatalities.
I am a Chinese too and I whole heartedly support the ban or restriction on alcohol. It is not about PAS or DAp its about common sense
Regarding the "Licenced Loan Sharkers" with a sweeter-sounding name i.e. licenced money lenders sanctioned by the Govt. of the day, let's just clarify one CORE under-lying problem which has gone un-unswered for umpteenth years! The powers-that-be gives freely these licences to their powerful political masters & their coterie of powerful associates?
Q1. Can somebody out there verify the truth about Ling Liong Sik's son Ling Liong Hee's shares in Sunbow Capital?
I have been waiting for you to blog on this issue since I get to know you about a year ago....
What whould be your recommendations to end this "BN Boleh" problem?
I would prefer MoF and Bank Negara to immediate to ban all licenses previously granted and replace by "micro credit scheme" which to be deliver through the commercial banking system.
Talk only.
Let me see you move to amend the law.
money lender r vandals to streetscape and housing area..please ask authorities to remove all their advertisement...they always post their contact number..call them n catch them
i always made to believe those 'ah longs' existed got mostly money laundering purposes...
well.. i do understand some ppl really go and pick up a high-interest loans and return them, i hv relatives do it once.. it's like THE MOST desperate ways to survival, for business or personal needs...
yet.. they are more helpful than banks sometime.. since gov is no where gonna help us, this might be a smart short term solutions... but u must hv great self control to avoid any further debts and pay back earliest possible...tat's about self control after all..
as money laundering part... just my stupid guess... i even bet internet cafe, and some bar, launge, and pool place are for money laundering purposes... as they are hard to trace for their revenues, expenses, and it comes with high margins.. :D
just 2 cents from my mind..
I cannot symphatize with ah longs. Most of them are involved with the illegal VCD business, and the money-lending is basically a money-laundering front.
Why is the government not cracking down on these people? Because some politicians are on their payroll perhaps? I wouldn't be surprised if that turns out to be true.
all you people busy banging on ah longs. you don't even know the bloody facts. all you know is what the papers n media tell u. all u know is about someone telling u, 'oh i heard this, oh i heard that'... well simply put, f*ck that. i mean just the name 'ah long' itself brings about a negative conotation. I would like 2 say something 1st and foremost, the day 'AH LONGS' are done away with in M'sia, just watch the economy and the people slowly collapse. not everyone is rich, NOT everyone is NOT in need of loans n financial aid. Our society is not an IDEAL society. it is quite self-explanatory. It will bring about more bad then good. i ask you this question, if anyone thinks we're such bad eggs, then why r so many ppl borrowing from us? answer that question yourself cos if i did, everyone would just say i'm doing a sales pitch here. and YES, i am involved in the money lending business. i will not bother saying whether i am legal or not because in the majority of the opinions expressed here it seems 2 not matter whether money lenders r legal, or not. They're just not well-liked, at all.
i have been involved in the money lending business nearly 8 years now. i have NEVER laid a hand on anyone UNLESS they laid a hand on me 1st. violence has always been viewed as a method of self-defence for me, and i mean that in every proper sense! yes i have to admit i may have lost my cool a few times and started shouting but i had my valid reasons. but as for physical violence to claim a debt, never, UNLESS in a situation where the borrowers decided to take matters into their own hands which i MUST say DOES INDEED and HAS happened (i.e: we have lent to people unknowingly to us, that they were affiliated with large drug dealing gangs, or some f*ckers were involved in conducting other illegal vice n businesses. when it's time 4 re-payment some of these ppl can bite back just as hard!)
i agree indeed there are plenty of bad eggs out there who claim money in violent and threatening ways, but my company has always relied on by-the-book methods, and i'm not talking about the kickboxing book! there are doctors, lawyers and architects out there who evade tax, commit fraud, cheat, commit crime etc... how come they don't carry that bad stigma like we do? why the f*ck do we? i can honestly tell you that there are A LOT of good and honest not to mention hard-working money lenders (or 'ah longs' as u call them) out there. but do you ever f*cking hear about them in the papers or news? sadly, no. you only hear about the piece of sh*t rotten eggs that beat the debts out of their borrowers, or worse.
let me also add that the MEDIA plays a big part in putting us in a f*cking negative light. put it this way, we have even been branded with a f*cked up name, 'ah long'... the name itself is menacing and mean to the core! the minute you hear that name, what do most ppl think? they think, oh shit... i will also further go on to say that i'm not defending all ah longs, i'm standing up for myself, cos there are those of us who do this kind of business honestly and properly. in other words, i REFUSE to be put down with the other rotten eggs!
i agree indeed there are plenty of bad eggs out there who claim money in violent and threatening ways, but my company has always relied on by-the-book methods, and i'm not talking about the kickboxing book! there are doctors, lawyers and architects out there who evade tax, commit fraud, cheat, commit crime etc... how come they don't carry that bad stigma like we do? why the f*ck do we? i can honestly tell you that there are A LOT of good and honest not to mention hard-working money lenders (or 'ah longs' as u call them) out there. but do you ever f*cking hear about them in the papers or news? sadly, no. you only hear about the piece of sh*t rotten eggs that beat the debts out of their borrowers, or worse.
let me also add that the MEDIA plays a big part in putting us in a f*cking negative light. put it this way, we have even been branded with a f*cked up name, 'ah long'... the name itself is menacing and mean to the core! the minute you hear that name, what do most ppl think? they think, oh shit... i will also further go on to say that i'm not defending all ah longs, i'm standing up for myself, cos there are those of us who do this kind of business honestly and properly. in other words, i REFUSE to be put down with the other rotten eggs!
this is truly a classic case of put yourself in my shoes. or even better put yourself in our borrower's shoes. for many, there will come a time when the bank acc is dry and the bank's unable 2 help you due to 1 or 2 of the endless technicalities of our finance system. for some of u, it may be easy 2 say it now, that u will never borrow from ppl like us. i advise u not 2 speak 2 soon. cos i just may be ur next best friend who's willing 2 cut u some slack, when the bank isnt =) figuratively speaking of cos on behalf of all GOOD money lenders. personally, i truly DESPISE money lenders who's violent tactics are number 1 on their list in terms of debt claims. f*ck them all and damn that lot 2 hell forever for ruining our image. cos they are the ones who collectively put ALL of us in this sh*thole negativ limelight. And the last time i checked, the guy who comes to re-possess your car from Maybank is a pretty big guy =) so who's the 'ah long' here? not me, not us.
let me end by saying, to each his own yes, but no one should ever deny the fact that whatever it is, everyone deserves a fair chance at what they do, provided it is done honestly and properly. let's not even talk about legal issues here, cos our gov't is a f*cking joke. i don't even want to get started on that lot!! if all of u say that it is cos of corruption that businesses like ours are able to operate, well let me say this: out of this or even BECAUSE of this corruption, me and my company have flourished an HONEST and PROPER money lending service.
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