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In brief

Hong Kong continues to have an active and growing money-lending market. Since 2016, the Hong Kong Government has adopted a four-pronged approach to enhancing the compliance standards of non-bank money lenders. The Hong Kong Companies Registry (CR), which currently performs the role of Registrar of Money Lenders (“Registrar“) pursuant to the Money Lenders Ordinance (MLO),1 recently released a new Guideline on Fit and Proper Criteria for Licensing of Money Lenders2 (“Fit and Proper Guideline“) and a Guideline on Submission of Business Plan by Applicant of a Money Lenders Licence3 (“Business Plan Guideline“). The new guidelines (“Guidelines“) will be effective from 1 April 2021. In this publication, we provide an overview of the money lenders regime in Hong Kong and the implications of the new Guidelines on new and existing market participants.

Background: The Hong Kong money lending regime

The money-lending regulations in Hong Kong are largely contained in a combination of the Banking Ordinance, which applies to banks, and the MLO, which applies to non-banks. The MLO requires non-bank money lenders to obtain a money lender’s licence. Under the MLO, the three governing authorities are:

  • the Licensing Court (which is responsible for determining applications for, and granting of, money lender’s licences)
  • the CR (being the current Registrar which is responsible for processing money lender’s licensing applications and renewal applications)
  • the Commissioner of Police (which is responsible for examining applications, investigations and enforcement)

The money lender’s licence is subject to annual renewal. In order to obtain a money lender’s licence, the essential factors to be satisfied include:

  • that the applicant is fit and proper to carry on business as a money lender
  • the premises to which the application relates are suitable
  • the grant of such licence is not contrary to the public interest

The money-lending regime has been tightening up since 2016 when the Registrar began to impose more stringent licensing conditions on money lender licensees. This trend is continuing, and the recent Guidelines provide further guidance on the fit and proper criteria and the business plan to be submitted to the Registrar to facilitate its assessment.4

The new Guidelines

Fit and Proper Guideline

The Fit and Proper Guideline will be applicable to money lender’s licence applicants, licensed money lenders and their related persons. The criteria and non-exhaustive list of matters that the Registrar will consider to determine the fitness and properness of applicants include:

Compliance records Whether there is any record of noncompliance with any provisions of the MLO, the Money Lenders Regulations, licensing conditions, guidelines issued by the Registrar on money lenders and (for Hong Kong incorporated or registered companies) the Companies Ordinance.
  • Genuineness and readiness to carry on money-lending business: Whether the person has a genuine intention and readiness to carry on the money-lending business set out in the application and the business plan submitted to the Registrar.
  • Policies and procedures: Whether there are adequate and effective policies, procedures and controls to cover, among other things, anti-money laundering and counter-terrorist financing, staff supervision, risk management, etc.
  • Information submitted to the Registrar: Whether there have been any instances of untrue, false or misleading information being submitted, or any omission of material information.
Financial status Whether the financial position of the person is suitable for the carrying on of the business of money-lending.
Ability to carry on money-lending business
  • Skills and knowledge, etc.: Whether the person is equipped with the necessarily skills, knowledge, experience, and professionalism.
  • Competence and honesty, etc.: Whether there has been any incompetence, dishonesty or incidences of negligence, e.g., dismissal and complaints history.
Reliability and integrity Whether the person has been found liable by a court or other competent authority in Hong Kong or elsewhere for fraud, dishonesty, misfeasance or other misconduct.
Disciplinary actions Whether the person has been refused or restricted, in Hong Kong or elsewhere, from the right to carry on any trade, business or profession for which a specific licence, registration or other authorisation is required by law.

Business Plan Guideline

Applicants for new licences and those seeking to renew an expired licence will be required to submit a business plan with their application to show that they have a comprehensive understanding of, and are ready to carry on, the money-lending business. The business plan should provide comprehensive information on the applicant’s proposed money-lending business to demonstrate that the applicant has the genuine intention to carry on the business of money-lending and the necessary resources to execute the business plan. In addition to a delay in the application process, failure to provide the necessary information in the business plan can cast doubt on whether the applicant is a fit and proper person to carry on business as a money lender.

An applicant should confirm that it is fully aware of, and will comply with, the provisions of the MLO, the conditions that may be imposed on the licence by the licensing court and the Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) Requirements for Licensed Money Lenders.

In summary, the business plan should address topics including the following:

Business and operations
  • proposed nature of the money-lending business and target customers
  • information on how the money-lending business will be operated including the entire loan transaction process, maximum debt coverage ratio of customers, etc.
  • information on delivery channels of the loan proceeds (e.g., collection in cash or via electronic transfers)
  • promotional channels, including location and frequency of advertisements
Management and human resources
  • management team composition and profiles of key executives, including their money-lending experience
  • staff composition, including the number of employees, their roles (e.g., compliance) and reporting lines
Shareholding structure
  • source(s) of funding and financial forecasts
  • organisation structure showing the beneficial owners and information on group entities (in particular those that are licensed with other regulators such as banks, insurance companies, regulated financial institutions, listed companies, and property developers)


Where there are any digital, outsourcing or third-party appointment arrangements contemplated, the business plan should also include the following:

Digitalised/screening systems Information on the digitalised and automated systems to be used, for example, for customer due diligence, verification by using artificial intelligence, online approval process and non-face-to-face risk assessment of customers and the name and address of the providers of the systems.
Use of intermediary or outsourced services for AML/CFT purposes Information on the intermediaries or outsourced services that are used by the applicant in the money-lending business for AML/CFT purposes.
Use of Appointed Third Party/Debt Collection Agent Information on any third party intended to be appointed to grant loans or act as a debt collection agent in the money-lending business and details of their intended functions.

Next steps

Existing money lender licensees and new applicants should ensure that they are familiar with the requirements of the new Guidelines and be aware of any additional guidance that may be released by the Registrar from time to time.

In preparing the business plan, we suggest it will be important to:

  • Capture all the necessary content as required under the new Business Plan Guideline.
  • Carefully consider the scope of the proposed money-lending business, the target clientele and how the business will be operated, which should be genuinely and realistically implemented.
  • Ensure that the business is sustainable having regard to funding and profitability.
  • Consider and ensure that the organisation structure and management team meet the relevant requirements.
  • Be familiar with any digitalised/screening systems, third-party appointment or outsourced services (to the extent there will be any), their nature and operations and discuss with the service providers, as needed, to obtain all necessary information (and conduct the appropriate due diligence before entering into any such arrangements).
  • Conduct and properly document an internal fit and proper assessment to ensure that the money lender and related persons can meet the criteria set out in the Fit and Proper Guideline.

If you have any questions on the topics covered or need further clarification on any particular issue, please do not hesitate to get in touch with your usual contact at Baker McKenzie, or any of the lawyers listed here.

1 Chapter 163 of the laws of Hong Kong SAR.
4 Please refer to the Hong Kong section of our Global Financial Services Regulatory Guide for a more detailed discussion of the overall licensing regime in Hong Kong available at


Karen Man is a partner in Baker McKenzie’s Financial Services group, leading the non-contentious Financial Services Regulatory practice. Her clients include global, Chinese and local banks, fund managers, brokers/dealers, money service operators and fintech firms. Karen is admitted to practice in Hong Kong, the UK, and Australia.


Grace Fung is a partner in Baker McKenzie’s Financial Services group.


Aaron Dauber is a Registered Foreign Lawyer and the Knowledge Lawyer for Baker McKenzie's non-contentious Financial Services Regulatory practice. He is responsible for monitoring and training on regulatory change, legal content projects and other knowledge initiatives to support the firm and our clients. Aaron's experience includes over 13 years' as an in-house counsel responsible for legal support to businesses across the Asia Pacific region including Japan and Australia with a global systemically important bank.