While some may feel a stigma about licensed moneylenders, many popular and reputable fintech companies and even neo-banks acquired such licenses to legally serve individuals or businesses which are not considered "Local Company".
In Singapore, you generally only need to be a legally registered company to offer B2B loans as an excluded moneylender. If you are curious to know, the distinction between lenders, you can do so by reading up, for example, the Finance Company Act, Moneylender Act and the Banking Act, on the Attorney-General's Chambers website and MAS’s website.
However, to offer loans to individuals or some company structure, one would typically need a banking or moneylender license. Many popular and reputable fintech companies and even neo-banks acquire such licenses to legally serve individuals or businesses which are not considered Local Companies, such as sole proprietors which is a business entity, but not a Company. (under ACRA Singapore, what we generally refer to as just companies are separated between "Local Company" and "Business Entity").
Moneylenders are also included in the many categories of lenders we work with, as they can ease the funding gap by offering lower starting loan amounts, faster processing time and relaxed eligibility criteria. (We have seen moneylenders charging lower than non-banks on quite a couple of occasions, too)
Another reason we do so is to ensure users get directed to licensed moneylenders instead of risking turning up at an unlicensed one. Unlike unlicensed moneylenders or loan sharks, licensed moneylenders are regulated by the law on various aspects of their dealings with you: From a cap on how much fees and interest they can legally charge, to how they can word their contracts, ensuring transparency.
Such laws are introduced to transform the industry and to allow them to play a valuable role in the credit ecosystem. You can visit the Ministry of Law’s website to find out more, or check out this article to learn more about Licensed Moneylenders vs Loan Sharks.
For your enquiry with fintech lenders holding such license, whether they parked the license under the company or a subsidiary, we will generally display them by their trading/brand name and/or under the non-bank lender category in your “Select Financing Partner” page if that is how they want to identify themselves, and since that is still that party that handles your enquiry.
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