Hong Kong Money Lender Licence Conditions Change on 1 August 2026: A Compliance Checklist

### New requirements take effect on 1 August 2026 The Registrar of Money Lenders has revised the **Guidelines on Licensing Conditions of Money Lenders Licence**. An additional licensing condition and two revised licensing conditions will apply to all money lender licences from **1 August 2026**. The changes focus on excessive borrowing, particularly unsecured personal lending to low-income earners, the use of loan referees and potentially misleading advertising. Licensed money lenders should complete their operational, documentation, system and staff-training changes before the effective date. ### 1. DSR caps for unsecured personal loans to low-income earners For this condition, a **low-income earner** is an intending borrower or borrower with monthly income of **HK$12,000 or less**. Before granting an unsecured personal loan, the lender must ascertain the borrower’s Debt Servicing Ratio (DSR), calculated as total monthly repayment obligations for unsecured personal loans — including the new loan — divided by monthly income. The applicable caps from 1 August 2026 are: - Monthly income of **HK$6,000 or less:** DSR must not exceed **35%**. - Monthly income from **HK$6,001 to HK$12,000:** DSR must not exceed **40%**. A lender must not grant the loan if the resulting DSR exceeds the applicable cap. Where a low-income borrower works under a fixed-term employment contract, the loan repayment period must not exceed the remaining term of that contract. The lender must retain written, video or audio records showing compliance. Where income is not fixed, the Guidelines require the lender to calculate average monthly income using income records from the latest three months or 12 months, whichever produces the higher average. Current income must be used; an expected future increase must not be included. ### 2. Loan referees can no longer be requested From 1 August 2026, licensed money lenders must not ask intending borrowers to provide referee information, or obtain such information from them, for loan applications. Application forms, scripts, online journeys and third-party procedures should therefore be revised. For referee information supplied on or before 31 July 2026, the lender must immediately cease using it and must not contact the referee for any purpose connected with the money-lending business. A referee has no legal or moral obligation to repay the borrower’s loan. ### 3. Advertising controls are tightened Money-lending advertisements must be fair, reasonable and non-misleading. The revised Guidelines give practical examples of problematic claims. In particular: - A maximum personal-loan amount should not be advertised without identifying the types of personal loans and categories of borrowers to which it applies, where omission would be misleading in light of the DSR caps. - Advertisements should not state or imply that an unsecured personal loan is guaranteed, pre-approved or available without credit checks or assessment of the borrower’s financial position. - Advertisements should not overstate how easy it is to borrow or repay. Existing statutory and licensing requirements — including displaying the money lender’s licence number and the prescribed risk-warning statement — continue to apply. ### Practical checklist before 1 August Licensed money lenders should consider the following actions: 1. Update credit policies and system rules for the HK$12,000 low-income threshold and the 35%/40% DSR caps. 2. Ensure total unsecured-loan repayments across relevant institutions, including the proposed loan, are captured in the DSR assessment. 3. Add fixed-term employment-contract checks and repayment-tenor controls. 4. Implement the required written, video or audio compliance records and retention procedures. 5. Remove referee fields and related consent/contact steps from paper forms, websites, apps, call scripts and intermediary workflows. 6. Stop using existing referee information from 1 August and restrict access where necessary. 7. Review advertisements, social-media content, landing pages and sales scripts for guaranteed, pre-approved, no-check or easy-repayment claims. 8. Train frontline, credit, marketing, compliance and third-party personnel, and retain evidence of the training and implementation review. HKBSCL can assist businesses with compliance-process reviews, accounting and record-keeping arrangements, internal-control documentation and operational readiness. Legal interpretation of individual licence conditions should be obtained from a qualified legal adviser where necessary. ### Official sources - Companies Registry, “What’s New”: https://www.cr.gov.hk/en/about/news/highlights.htm - Guidelines on Licensing Conditions of Money Lenders Licence (April 2026; effective from 1 August 2026): https://www.cr.gov.hk/en/publications/docs/Conditions_ML_e_Apr2026.pdf *This article is for general information only and does not constitute legal, accounting, tax or other professional advice. Businesses should review the official Guidelines and obtain advice appropriate to their circumstances.*