New credit bureau known as MLCB to give singapore licensed moneylenders access to borrowers’ data

From March 1, licensed moneylenders will have access to a central data repository of borrowers’ loan and repayment records from the new Moneylenders Credit Bureau (MLCB).

This will allow licensed moneylenders to assess the creditworthiness of borrowers, and help borrowers avoid borrowing beyond their means, the Ministry of Law (MinLaw) said today (Feb 24) as it announced the launch of the MLCB.

All licensed moneylenders will have to provide regular updates on borrowers’ loan information to the bureau, so that it can generate individual credit reports on each borrower.

The reports will be available for purchase to both borrowers and licensed moneylenders at $1 and $0.50 per report respectively.

“Borrowers can use their own credit reports to keep track of and better manage their own loans. Licensed moneylenders can use a borrower’s credit report for better credit risk assessment before granting a new loan, and deny loans to those who are borrowing beyond their means,” MinLaw said.

“This in turn can help licensed moneylenders to lower the default rate and hence, their cost of doing business. Licensed moneylenders can also use the credit reports to keep track of borrowers with active loan contracts with them, including whether the borrowers have taken up other new loans.”

The idea of a credit bureau for licensed moneylenders came about in March 2014, as one of the measures announced by MinLaw to improve the balance between protecting borrowers and preserving their access to credit.

The ministry appointed credit reference agency DP Information Group in November last year to design and develop the MLCB, and to manage its operations thereafter.

“In addition to protecting borrowers from overborrowing, the MLCB can help licensed moneylenders make better informed decisions and credit assessments. It is a positive step towards helping to mitigate the risk in our high-risk industry,” president of the Moneylender’s Association of Singapore Peter Tan said.