Section 3 provides that:
.. any person who lends a sum of money in consideration of a larger sum being repaid shall be presumed until the contrary is proved to be a moneylender.
How can a lender rebut the presumption that he is a moneylender ?
Not every man who lends money at interest carries on the business of moneylending. Generally, a man who carries on a moneylending business is one who is ready and willing to lend to all and sundry. It does not mean that a moneylender can evade the Act by limiting his customers to those whom he chooses to designate as "friends".
What is prohibited by the Act is not moneylending but the business of moneylending. The giving of a number of loans to friends does not constitute the business of moneylending, unless there is a system and continuity about the transactions.The lender must show that although he engages in moneylending, he is not in the business of moneylending. In this respect it is important to establish whether there is a system and continuity in his moneylending activity. When such ingredients are present, one solitary loan may be sufficient to nail a person as a moneylender.
Whether one can be said to be carrying on the business of moneylending must depend on the particular facts of any given case. T he lender normally must discharge the burden placed upon him by himself giving evidence to the effect that he is not a moneylender and by submitting to cross-examination on the point.
A moneylender must have a licence
Section 5(1) of the Act provides:
Every moneylender .. carrying on the business of moneylending in Singapore shall take out a licence..
The court will not help an unlicensed moneylender to claim back a loan.
Section 5(2) reads:
A licence shall be taken out in respect of each name under which moneylending business is conducte. No licence shall be granted to a person not ordinarily resident i n Singapore or to a firm where the person proposed to be responsible for the management of the firm is not ordinarily resident in Singapore.
Section 8(1)(b) reads:
If any person... (b) carries on business as a moneylender without holding a licence or, being licensed as a moneylender, carries on business as such in any name other than his authorised name or at any place other than his authorised address or addresses; he shall be guilty of an offence.
The test of residence for the purposes of the Act is the same as the test of residence used in revenue cases. The relevant test is contained in section 2 of the Income Tax Act (Cap 134) which provides:
....in relation to an individual, means a person who, in the year preceding the year of assessment resides in Singapore except for such temporary absences therefrom as may be reasonable and not inconsistent with a claim by such a person to be resident in Singapore and includes a person who is physically present or who exercises an employment (other than as a director of a company) in Singapore for 183 days or more during the year preceding the year of assessment.
Thus there is a test relating to physical presence and one relating to employment.
A licensed moneylender cannot impose interest at more than 20% per annum (section 23(5) of the Moneylenders Act).
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