Singapore , Jan 09, 2025
The Monetary Authority of Singapore (MAS) announced a crackdown on unregulated digital lenders this week, citing growing concerns over consumer exploitation and financial system risks. These “shadow lenders,” operating through mobile apps and social media platforms, have been blamed for predatory lending practices and evading existing licensing rules.
In a press release, MAS unveiled a new regulatory framework that mandates full disclosure of loan terms, borrower protections, and mandatory registration for all digital credit providers—regardless of size or platform. The authority is also coordinating with the Cyber Security Agency (CSA) to block illegal lending platforms and penalize non-compliant fintech firms.
“Financial inclusion should not come at the cost of consumer safety,” said MAS Deputy Managing Director Tan Li San. “Unlicensed lenders undermine trust and exploit loopholes to prey on the most vulnerable.”
Over the past year, Singapore has seen a sharp rise in online lending complaints, particularly involving excessive interest rates and abusive debt collection practices. Civil society organizations have welcomed the move, urging MAS to create public awareness campaigns to educate borrowers about licensed services.
Fintech analysts believe the new measures will help legitimize the digital lending space while maintaining Singapore’s status as a global financial hub. “It’s a smart balance—ensuring innovation isn’t stifled while consumer protection remains a top priority,” said Professor Raymond Toh of NUS Business School.
The MAS also hinted that further legislation may follow if underground lending continues to pose a systemic threat.
