KOTA KINABALU; The government does not plan to abolish money lending licences issued under the Money Lender Act 1951, said Deputy Housing and Local Government Minister Datuk Seri Lajim Ukin.
He said this was because the act was originally aimed at helping and giving the opportunity to the public to take up loans in an easy and legal manner. “Only some of these licensed money lending agencies were reported to have violated the regulations stipulated by the Housing and Local Government Ministry.
“They are abusing the licences to make hefty profit and I was made to understand that some of them even charged an (annual) interest rate up to 40 per cent, which is much higher than the interest rate charged by ‘Ah Long’ (loan sharks)… we should not allow this to persist,” he told reporters after hosting an Aidilfitri open house in Likas near here on Tuesday.
Lajim was commenting on the call on the government to revoke all licences issued to money lending agencies for allegedly causing more social problems in the society.
Certain quarters even said that the existence of such agencies was no longer relevant as the public could take up loans from other institutions under the Finance Ministry and Bank Negara.
Commenting further, the deputy minister said under the regulations, licensed money lending agencies should not charge an annual interest rate of more than 18 per cent and should not keep the debtor’s bank card as security of payment.
Lajim said the ministry viewed the matter seriously and would not hesitate to take stern action against errant agencies.
“We would also like to ask the public with information about errant money lending agencies to contact the ministry directly to ease the investigation process,” he said.
In Sabah, he said reports could be lodged at Sabah Finance Ministry, which had been delegated with the power to issue the money lending licences in the state, while in Sarawak, the licences were issued by Chief Minister’s Office and Resident’s Office.
In other development, Lajim said the reconstruction of the abandoned People’s Housing Project in Kionsom, Inanam had been resumed and was expected to be completed by April next year.
He said the new contractor appointed for the project had started the work to build 1,000 units of three-room houses since August 2009.
The appointment of the new contractor had also caused the overall cost of the project to increase to RM70 million from the original RM57 million, he said.
The National Housing Department had terminated the contract given to the original developer when they failed to complete the project on schedule after it was launched in July 2003.
On another abandoned PPR project in Kibabaig, Penampang, Lajim said the construction of the project would also resume soon. – Bernama