Written by 
Themis Qi
Regulation on creditors will be tightened – including introducing a borrowing ceiling for unsecured personal loans – says Secretary for Financial Services and the Treasury Christopher Hui Ching-yu.
The issue has taken a social tone amid cases of domestic helpers – and their employers – being harassed by financial firms for missing payments.
On his blog, Hui said the Financial Services and the Treasury Bureau is drafting specific measures to further regulate moneylenders to tackle the problem of overborrowing by helpers and low-income earners.
A consultation is expected to start in the first half of next year.
One of the measures that the bureau is studying is to introduce a borrowing ceiling for unsecured personal loans based on the monthly income of borrowers.
The government has regularly tightened controls on unsecured personal loans. From 2021, moneylenders have been required to assess a borrower’s ability to repay debts when a significant increase in loans is approved without any collateral.
In 2022, authorities lowered the statutory lending rate cap from 60 percent to 48 percent per annum and the extortionate interest rate threshold from 48 percent to 36 percent per year.
Some employers of domestic helpers, speaking at a press conference in June, reported cases where their helpers were suspected of having fallen into loan traps.
In one case, a helper received a loan of HK$2,000 after consulting an offshore financial firm and offering her personal information only to find out after two weeks that the amount of the loan and interest to be repaid swelled to HK$4,800.
And if helpers miss repayments, the moneylenders will harass the borrowers and even their employers, using varying tactics including verbal threats and faking indecent photos by using artificial intelligence.
In response, Hui said at the time that the bureau takes the issue seriously, adding it will strictly regulate licensed moneylenders and step up publicity and education to remind helpers to exercise prudence in borrowing.
Hui yesterday said the bureau is also considering an additional measure – that moneylenders must check with persons consulting on the loans for the authenticity of their written consent.
The Company Registry will optimize the complaint-handling process and strengthen the system and procedures for supervising the complaints about moneylenders, Hui added.
Another measure is to increase education targeting domestic helpers, youngsters and low-income earners to enhance their knowledge of borrowing.
Meanwhile, data related to consumer credit reference services in Hong Kong has been completely transferred to “Credit Data Smart” initiated by the Hong Kong Monetary Authority.
themis.qi@singtaonewscorp.com