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Addressing Concerns about Money Lending - Protecting the Legitimate Rights and Interests of Foreign Domestic Helpers and Their Employers through Regulation and Education

Foreign domestic helpers (FDHs) contribute significantly to our society.  However, their financial well-being while working in Hong Kong, in particular the way they borrow money from finance companies, has given rise to a number of issues, including the harassment of FDH employers by money lenders or the debt collectors they engage.  This is also a concern that many legislators have relayed to me recently.  In this regard, the Registrar of Money Lenders will issue a letter (see attachment) to all licensed money lenders today, reminding them to pay particular attention to the relevant licensing conditions in respect of certain illegal money lending and debt collection practices.  In parallel, we will adopt a “carrot and stick” approach and continue to step up promotional and educational efforts on prudent borrowing by FDHs, with a view to better protecting the rights and interests of both FDHs and their employers.

Regulation of money lenders 

Money lenders should assess FDHs’ affordability before releasing loans to them.  Pursuant to Licensing Condition 15 of the Money Lenders Licence, a money lender shall, before entering into any agreement for unsecured personal loan or before granting any significant increase in the amount of loan under an agreement for unsecured personal loan, undertake an assessment of the intending borrower’s or borrower’s ability to make repayments under the loan agreement affordably and have due regard to the outcome of the assessment.  The money lender shall consider the FDH’s current income and expenditure, as well as his/her ability to make repayments under the loan agreement, ensuring that he/she is able to make repayments as they fall due over the life of the agreement without the need for further borrowing to repay the debts, and that the repayments will not have a significant adverse impact on the FDH’s overall financial situation.

 
Pursuant to Licensing Condition 13 of the Money Lenders Licence, where a referee is provided in respect of a loan application, the money lender shall, before entering into any loan agreement, ask the intending borrower to provide a written consent signed by the referee confirming his/her agreement to act as a referee for the loan application.  If the money lender is informed or aware that the written consent was, in fact, not signed by the referee, he/she shall immediately cease to use the information of the referee.  In case no written consent is given by an employer to act as a referee for his/her FDH, the money lender shall not contact the employer regarding the loan.


The role of a referee is confined to the provision of information about an intending borrower in respect of a loan application.  Under no circumstances is a referee liable for repayment of a loan. 
 

Regarding the issue of indebted FDHs and their employers being harassed by debt collectors, the current licensing conditions for money lenders clearly set out the relevant requirements for debt collection.  Pursuant to Licensing Condition 10 of the Money Lenders Licence, money lenders and their debt collectors shall not try to recover debts from anyone unless such person is in law indebted to them, and they shall not harass anyone or adopt unlawful or improper debt collection practices while trying to locate the whereabouts of debtors.

We solemnly urge all money lenders to comply with the licensing conditions in running their business.  Any breach of the licensing conditions during the course of business is an offence under the Money Lenders Ordinance (Cap. 163).  Upon conviction, offenders are subject to a maximum penalty of a $100,000 fine and imprisonment for two years.  Furthermore, the Money Lenders Section of the Companies Registry (CR) and the Police will follow up any complaints against money lenders and their debt collectors regarding the harassment of referees or any other non-debtors, as well as any unlawful or improper debt collection practices.  Over the past five years, the CR has conducted about 2 160 onsite inspections, issuing a total of 509 rectification orders and 20 warning letters to money lenders for irregularities found during the inspections.  Moreover, the CR or the Police will, where necessary, raise objections before the Licensing Court against any renewal applications lodged by the licensed money lenders concerned.


Enhancing promotional and educational efforts

The borrowing problems of FDHs not only affect their own financial well-being, but also bring much trouble to their employers.  We take the matter very seriously, and will respond through stringent regulation of licensed money lenders and enhanced promotional and educational efforts.  Money lenders must observe the licensing conditions and operate in accordance with the law, and ensure that the rights and interests of FDHs and their employers are not prejudiced.  Meanwhile, FDHs and their employers should acquaint themselves with the relevant laws and safeguarding measures, and seek timely assistance in case of problems.
 

For 2024-25, we have earmarked nearly $1 million for promotional campaigns on prudent borrowing.  The Government will continue to step up its promotional and educational efforts targeting the FDH community to improve their understanding of money borrowing.  It will adopt a multilingual and multipronged approach to promoting the importance of prudent borrowing through such means as public transport advertisements, the Internet and promotion leaflets, with a view to getting the message across to target groups which are more susceptible to over-borrowing (such as FDHs), reminding them of the points to note when taking out a loan, including the need to seek prior consent from the referee to give his/her particulars for the purpose of loan application.
 

In addition, we will strengthen co-operation with the Labour Department, the Investor and Financial Education Council (IFEC) and non-governmental organisations to ensure effective dissemination of our message and more comprehensive protection for FDHs and their employers.  We have earlier produced video clips to remind the FDH community of the importance of cautious borrowing and the need to seek assistance from counselling agencies when in doubt.  The video clips have been uploaded respectively to the FSTB’s and the IFEC’s social media pages for public education (namely “Warning Bros” (This link will open in a new windowhttps://www.facebook.com/warningbroshk/) and “IFEC The Chin Family” (This link will open in a new windowhttps://www.facebook.com/ifec.thechinfamily)), and disseminated to relevant FDH groups through non-governmental organisations.


We call on all licensed money lenders to strictly comply with the regulations.  Members of the public who wish to lodge a complaint or seek help should contact the CR’s Money Lenders Section (Tel: 2867 2634) or the Police promptly.  We believe that through collaboration between the Government and various sectors of our society, we can effectively reduce the problems caused by FDH borrowing and protect the legitimate rights and interests of all parties concerned.

This link will open in a new windowLicensing Conditions of Money Lenders License Requiring Special Atention for Loans to Foreign Domestic HelpersPDF file

 

27 June 2027