Akta Pemberi Pinjam Wang 1951
Applies to: Federal Act — see s 1 (Short title and application) · Official text ↗
- Defines key terms such as 'moneylender', 'borrower', and 'interest' (s 2).
- Requires all moneylenders to hold a valid licence to operate (s 5).
- Sets maximum interest rates for secured and unsecured loans (s 17a).
- Mandates that borrowers receive a copy of the signed and stamped agreement before money is lent (s 16).
- Prohibits moneylenders from charging illegal expenses or fees beyond stamp duties and legal costs (s 23).
- Criminalises harassment, intimidation, and false statements by moneylenders (ss 29, 29b).
What this law is
The Moneylenders Act 1951 (Akta Pemberi Pinjam Wang 1951) is numbered Act 400 in the Laws of Malaysia. Where it applies is set out in section 1 (Short title and application).
Its long title, as printed in the official text: An Act for the regulation and control of the business of moneylending, the protection of borrowers of the monies lent in the course of such business, and matters connected therewith.
Read every section, the amendment history and the official copy on our law library page for this Act.
How the Act is arranged
- Part I — Preliminary (ss 1–4A)
- Part II — Licensing of moneylenders (ss 5–10)
- Part III — Investigation, search, seizure and arrest (ss 10A–10K)
- Part IV — Evidence (ss 10L–10OC)
- Part V — Conduct of moneylending business (ss 10P–26)
- Part VI — Miscellaneous (ss 27–31)
Part titles are from the official arrangement of sections.
Time limits in this Act
| What | Limit | Section |
|---|---|---|
| Time to provide additional documents or information requested by the Registrar during a licence application | within a specified time or any extension of time granted by the Registrar | s 5a(2) |
| Time for a licensee to comply with a demand for a statement of account or documents | one month after the demand has been made | s 19(3) |
Offences and penalties
| Offence | Penalty (as written in the Act) | Section |
|---|---|---|
| Carrying on moneylending business without a valid licence | fine of not less than two hundred and fifty thousand ringgit but not more than one million ringgit or to imprisonment for a term not exceeding five years or to both, and in the case of a second or subsequent offence shall also be liable to whipping | s 5(2) |
| Executing a moneylending agreement that does not comply with section 16 | fine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding twelve months or to both | s 16(2) |
| Charging interest above the prescribed limits | fine not exceeding twenty thousand ringgit or to imprisonment for a term not exceeding eighteen months or to both | s 17a(4) |
| Preparing an agreement where principal or interest is not truly stated or left blank | imprisonment for a term not exceeding two years or to a fine not exceeding twenty thousand ringgit or to both | s 27b |
| Fraudulently inducing a person to borrow money | imprisonment for a term not exceeding two years or to a fine not exceeding twenty thousand ringgit or to both | s 29 |
| Harassing or intimidating a borrower | fine of not less than fifty thousand ringgit but not more than two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both, and in the case of a second or subsequent offence shall also be liable to whipping | s 29b(1) |
Laws cited on this page
| Act 400 | Moneylenders Act 1951 Akta Pemberi Pinjam Wang 1951 | PDF · Official ↗ |
Each law links to our mirror page: a copy of the official text captured on a known date, its version history, and the official source. Law library →
Key sections
| Provision | What it says, in plain words |
|---|---|
| s 1 | The Act applies to the whole of Malaysia. |
| s 2 | Defines 'moneylender' as anyone carrying on or advertising the business of moneylending, and 'interest' as any amount charged in excess of the principal, excluding lawful stamp duties and fees. |
| s 5 | No person may carry on or advertise moneylending business without a licence, and doing so is an offence. |
| s 5a | Applications for a licence must be made in writing to the Registrar, and if required additional documents are not provided within the specified time, the application is deemed withdrawn. |
| s 15 | Any moneylending agreement made by an unlicensed moneylender is not enforceable. |
| s 16 | A moneylending agreement is not enforceable unless it is signed by all parties and a duly stamped copy is delivered to the borrower before the money is lent. |
| s 17a | Interest for secured loans must not exceed twelve per cent per annum, and for unsecured loans must not exceed eighteen per cent per annum; agreements charging more are void. |
| s 19 | On written demand and payment of three ringgit, a licensee must provide a statement of account showing the loan details, payments received, and sums due. |
| s 23 | Any agreement for the borrower to pay costs or expenses other than stamp duties, legal fees, or statutory fees is illegal, and any such sum paid is recoverable by the borrower. |
| s 27b | It is an offence for a licensee to prepare an agreement where the principal or interest rate is not truly stated or is left blank to be filled in later. |
| s 29 | It is an offence to fraudulently induce a person to borrow money using false, misleading, or deceptive statements or by concealing material facts. |
| s 29b | It is an offence for a moneylender or their agent to harass or intimidate a borrower, their family, or anyone connected with the borrower. |
Worked examples
Facts. Ahmad advertises loans at interest on social media and lends to many people, but has no moneylender's licence. Raj borrows from him.
The law. No person may carry on, advertise or hold himself out as carrying on the business of moneylending unless licensed (s 5(1)). A moneylending agreement made by an unlicensed moneylender is not enforceable (s 15).
Outcome. Ahmad commits an offence punishable by a fine of RM250,000 to RM1 million or up to five years' imprisonment or both, and whipping for a second or subsequent offence (s 5(2)). He cannot enforce the agreement against Raj (s 15).
Facts. Siti borrows money from a licensed moneylender, Lim, for a secured loan. The agreement states an interest rate of twenty per cent per annum.
The law. Interest for a secured loan shall not exceed twelve per cent per annum (s 17a(1)). If the interest charged is more than specified, the agreement is void and not enforceable (s 17a(3)).
Outcome. The agreement is void and has no effect (s 17a(3)). Lim commits an offence for contravening the interest limits (s 17a(4)).
Facts. A collector acting for a licensed moneylender, Tan, goes to the home of borrower Mei and shouts threats at her family to demand repayment.
The law. A moneylender who, personally or through anyone acting for him, harasses or intimidates a borrower or her family commits an offence (s 29b(1)); the person acting for the moneylender also commits an offence (s 29b(2)). Harassment includes conduct that a reasonable person would find offensive, humiliating or intimidating (s 29b(5)(b)).
Outcome. Tan is liable to a fine of RM50,000 to RM250,000 or up to three years' imprisonment or both (s 29b(1)); the collector to a fine of RM10,000 to RM50,000 or up to two years or both (s 29b(2)).
Examples are simplified illustrations with invented names; real cases turn on their own facts.
Questions & answers
Do I need a licence to lend money to friends?
If you carry on or advertise the business of moneylending, you must be licensed (s 5(1)). The definition of 'moneylender' includes anyone who carries on or advertises the business of moneylending (s 2). Lending money at interest in the course of business requires a licence (s 2, s 5(1)).
What is the maximum interest rate I can be charged?
For a secured loan, the interest shall not exceed twelve per cent per annum (s 17a(1)). For an unsecured loan, the interest shall not exceed eighteen per cent per annum (s 17a(1)). Any agreement charging more is void (s 17a(3)).
Can a moneylender charge me for 'processing fees' or 'admin costs'?
No, any agreement for the payment of costs or expenses other than stamp duties, fees payable by law, and legal costs is illegal (s 23). If you pay such a sum, it is recoverable as a debt due to you (s 23).
What happens if the moneylender does not give me a copy of the agreement?
The agreement is not enforceable unless a copy duly stamped is delivered to the borrower before the money is lent (s 16(1)). The licensee commits an offence if they execute an agreement that does not comply with this section (s 16(2)).
Can I ask for a statement of account from my moneylender?
Yes, you can make a reasonable demand in writing and tender three ringgit for expenses (s 19(1)). The licensee must supply a statement of account showing the loan details and payments (s 19(1)).
Is it illegal for a moneylender to threaten me or my family?
Yes, it is an offence to harass or intimidate a borrower or any member of their family (s 29b(1)). This includes making statements or gestures intending to be heard or seen by the person (s 29b(4)).
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Sources
Related
Consumer rightsEnforcing a judgmentInsolvency Act 1967Contracts Act 1950