MONEYLENDING ACT

ARRANGEMENT OF SECTIONS

   1   Short title and interpretation

   2   Reopening of moneylending transactions and relief

   3   Presumption where interest charged exceeds 20 per cent per annum

   4   [Repealed by Act 8 of 1997 s 3.]

   5   [Repealed by Act 8 of 1997 s 3.]

   6   Penalties for false statements and representations

   7   Moneylending advertisements

   8   Form of moneylending contracts

   9   Prohibition of compound interest and provision as to defaults

   10   Obligation of lender to supply information as to the state of loan and copies of documents relating thereto

   11   Provisions as to bankruptcy proceedings for lender's loans

   12   Prohibition of charge for expenses on loans

   13   Exemptions

   14   Minister's power to declare exemptions

 

THE MONEYLENDING ACT

[Date of Commencement: 27th January, 1938]

Cap 254

Acts
30 of 1967,
33 of 1970,
18 of 1974,
8 of 1997,
29 of 2003.

1   Short title and interpretation

   (1) This Act may be cited as the Moneylending Act.

   (2) In this Act-

   "interest" does not include any sum lawfully charged in accordance with the provisions of this Act by a lender of money for or on account of costs, charges or expenses, but save as aforesaid includes any amount, by whatsoever name called, in excess of the principal, paid or payable to a lender in consideration of or otherwise in respect of the loan;

   "principal" means in relation to a loan the amount actually lent to the borrower.

2   Reopening of moneylending transactions and relief

   (1) Where proceedings are taken in any Court by any person for the recovery of any money lent either before or after the commencement of this Act, or the enforcement of any agreement or security made or taken in respect of money lent either before or after the commencement of this Act, and there is evidence which satisfies the Court that the interest charged in respect of the sum actually lent is excessive, or that the amounts charged for expenses, enquiries, fines, bonuses, premiums, renewals or any other charges, are excessive, or that, in any ease, the transaction is harsh or unconscionable, the Court may reopen the transaction, and take an account between the parties, and shall, notwithstanding any statement or settlement of account, or any note, security or agreement purporting to close previous dealings and create a new obligation, reopen any account already taken between them, and relieve the person sued from payment of any sum in excess of the sum adjudged by the Court to be fairly chargeable and due in respect of such principal, interest and charges, as the Court, having regard to the risk and all the circumstances, may adjudge to be reasonable; and if any such excess has been paid, or allowed in account, by the debtor, may order the creditor to repay it, and shall set aside, either wholly or in part, or revise, or alter any security given, or agreement made in respect of money lent, and if the lender has parted with the security, may order him to indemnify the borrower or other person who gave such security.

   (2) Any Court in which proceedings might be taken for the recovery of money lent, shall have, and may at the instance of the borrower, or surety, or other person liable, exercise the like powers as may be exercised under this section where proceedings are taken for the recovery of money lent, and the Court shall have power, notwithstanding any provision or agreement to the contrary, to entertain any application under this Act by the borrower, or surety, or other person liable, notwithstanding that the time for the repayment of the loan, or any instalments thereof, may not have arrived:

   Provided that in the event of the bankruptcy of the borrower the powers of a Court under this subsection may be exercised at the instance of the Trustee in Bankruptcy notwithstanding that he may not be a person liable in respect of the transaction.

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   (3) On any application relating to the admission or amount of a proof in any bankruptcy proceedings in respect of any loan, the Court may exercise the like powers as may be exercised under this section when proceedings are taken for the recovery of money.

   (4) The foregoing provisions of this section shall apply to any transaction which, whatever its form may be, is substantially one of moneylending.

   (5) Nothing in this section shall be construed as derogating from the existing powers or jurisdiction of any Court.

3   Presumption where interest charged exceeds 20 per cent per annum

[8/1997 s 2(a) and (b).]

   (1) Where, in any proceedings in respect of any money lent after the commencement of this Act or in respect of any agreement or security made or taken after the commencement of this Act in respect of money lent either before or after the commencement of this Act, it is found that the interest charged exceeds the rate of the prescribed rate per annum, the Court shall, unless the contrary is proved, presume for the purposes of section 2 that the interest charged is excessive and that the transaction is harsh and unconscionable, but this provision shall be without prejudice to the powers of the Court under that section where the Court is satisfied that the interest charged, although not exceeding the prescribed rate per annum, is excessive.

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