KUALA LUMPUR: The market value of the community credit industry - comprising licenced moneylenders (PPW) and pawnbroker companies (PPG) reached RM24.8 billion last year.
Housing and Local Government Minister Nga Kor Ming said the industry's market value is also expected to increase each year following business expansion.
"Over the past 10 years, the industry has grown in tandem with global changes and has expanded lending on a moderate to large scale, particularly in the corporate loan segment," he told a press conference at the pre-launch of the Madani Credit Award, today.
Nga also said there were two main segments of borrowers who obtain loan services from licenced moneylenders (PPW), namely individual borrowers and corporate borrowers.
He added from 2021 to 2023, 62 per cent of the total loan issued by licenced moneylenders (PPW) was to corporate borrowers.
"Meanwhile, the remaining 38 per cent was to individual borrowers."
He added that up until April 2024, PPW licence holders stood at 4,416, of which 3,306 holders were from the Peninsula and another 1,110 were from Sabah and Sarawak.
"During the same period, there are also 881 PPG licence holders nationwide and the regulation of all the licence holders is under the ministry's jurisdiction."
At the same time, Nga also urged the public, especially those in need, to apply for loans from proper channels such as banks and licenced moneylenders and pawnbroker companies.
He also assured that borrowers of licenced moneylenders and pawnbroker companies could have their safety and rights guaranteed, in line with the Moneylender Act 1951 and Pawnbrokers Act 1972 as both entities are under the ministry's purview.
He also said the community credit industry under the ministry's regulation was also subjected to the Moneylenders Act and the Pawnbrokers Act, aside from the obligation to comply with the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 to ensure transparency in operations and transactions conducted.
"Borrowers are not protected by the law if they borrow with loan sharks (Ah Long) as they operate without licence.
"Furthermore, loan shark activities are illegal and it falls under the jurisdiction of the police.
"Hence, I humbly urge all Malaysians to use the legitimate and proper channels if they need to borrow money. Do not borrow from loan sharks."
Nga also assured that a police team would monitor licenced moneylenders and pawnbroker companies to ensure that they do not violate the law.
Meanwhile, commenting on the Madani Credit Award, Nga said the award was aimed to recognise the commitment of licenced moneylenders and pawnbroker companies in implementing innovation and corporate social responsibility (CSR), as well as fostering a spirit of competitiveness in providing benefits, especially to the local community.
This includes providing credit support to entrepreneurs and corporate companies, he said.
The award also consisted of seven categories for licenced moneylenders and pawnbroker companies respectively, namely the Minister's Special Award, Best Innovation Award, Best Corporate Social Responsibility (CSR) Award, and Most Valuable Business Award.