Thursday, May 20, 2010

Licensed moneylender stuck in a bind

LICENSED moneylender Vincent Koh was once a loan shark who started an illegal moneylending business when he was 21 years old.

He was arrested less than a year later and, for his involvement in loan sharking activities, he was fined more than $100,000.

Now, 17 years on, he is a top property agent - and a licensed moneylender. But there could be another twist to his life story.

The 38-year-old has found himself stuck in a bind after the Government announced new rules this month that prohibit licensed moneylenders from working as property agents and vice-versa.

Although the rules will be introduced only later this year, he says he was fired from the property agency at which he was working after his boss found out that he holds a moneylending licence.

Mr Koh says he applied for the licence last year. With no criminal convictions in the last 10 years, he declared himself to be free of criminal records. He received his licence this January.

In just two months, he has given out close to $600,000 in loans. At least $400,000 has yet to be recovered.

He said he started the loan business because it complemented his property business - those who sell their flats are usually in need of quick cash. With a moneylending arm, he could help tide them over while they were waiting for the sale proceeds.

Mr Koh says he sold two of his apartments - a condominium unit in Woodlands and a flat in Commonwealth - and pumped $1 million into the business.

'I did everything by the law and suddenly I am told that I have to stop and that what I am doing is wrong,' he said. 'How is this fair?'

He charges his borrowers, mostly those who sell their flats through him, monthly interest rates of between 1.5 per cent and 15 per cent. The shorter the repayment period, the higher the rates. The loans range from $3,000 to $60,000.

'If we can't lodge caveats, there is no surety. Who is willing to take such risks?' he said. 'Loan sharks will be back in business.'

Source: Straits Times, 20 May 2010

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