Moneylender

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A moneylender is a person or group who typically offers small personal loans at high rates of interest that distinct from banks and financial institutions that typically provide such loans.[1] The high interest rates charged by them is justified in many cases by the risk involved.

They play an active role in lending to people with less access to banking activities, such as the unbanked or underbanked or in situations where borrowers do not have good credit history. They sometimes lend to people like gamblers and compulsive shoppers who often get into debt.

Many countries have laws in place that require moneylenders to be registered, and set limits on the interest rates that may be charged. For example, in India licensed moneylenders are governed by Money Lenders Acts of respective states.[2]

See also[edit]

References[edit]

  1. ^ "Money Lenders". Fintotal. November 27, 2012. 
  2. ^ "The Bombay Money-Lenders Act 1947" (PDF). Bombay High Court. December 29, 1997.