How to check that a moneylender is licensed

A banner on the roadside, a WhatsApp message from a number you don't know, a Facebook ad promising "cash in one hour". When you need money quickly, there is no shortage of people offering to lend it. Some are licensed moneylenders operating under the law. Others are illegal lenders, better known as Ah Long, whose costs and collection methods can turn a small cash problem into a frightening one.

Checking which is which takes about ten minutes, and you can do it before you share a single document. Here is how.

Who licenses moneylenders in Malaysia

Moneylenders in Malaysia are regulated under the Moneylenders Act 1951. In Peninsular Malaysia they are licensed by the Ministry of Local Government Development (Kementerian Pembangunan Kerajaan Tempatan, KPKT), through its Community Credit Control Division (Bahagian Kawalan Kredit Komuniti, BKKK). Sabah, Sarawak and Labuan have their own licensing authorities. The licence is what allows a company that is not a bank to lend to the public as a business (see moneylender licence in our glossary). Banks are supervised separately by Bank Negara Malaysia (BNM). So first ask: what kind of lender is this?

• If it says it is a moneylender, it should appear on KPKT's list of licensed moneylenders.
• If it says it is a bank or financial institution, it should appear on BNM's list of licensed financial institutions.
• If it cannot say which, or says it is "private funding", "an investor" or "a friend of the boss", it is not a licensed lender.

Two things are often mistaken for a licence. An SSM registration number only shows that a business is registered with the Companies Commission of Malaysia, not that it may lend money. And a certificate photo or a screenshot of a "licence" proves nothing, because anything the lender sends you can be edited. KPKT's official list cannot.

How to check, step by step

1. Get the lender's full company name and licence number. A real licensed moneylender will give you both without hesitation. If the person refuses, changes the subject or gives only a nickname, treat that as your answer.
2. Check with KPKT yourself. The simplest way is KPKT's free official app, i-KrediKom, from the official app stores. You can also use KPKT's website: type the address into your browser or search for the ministry by name, rather than tapping a link someone sent you. Fake sites can copy the look of a government page. For a lender in Sabah, Sarawak or Labuan, check with that state's licensing authority.
3. Match the details exactly. Check that the company name, licence number and business address on the list match what the lender gave you, letter for letter. Scammers sometimes use a name that is one word different from a real company, such as an extra "Capital" or "Sdn Bhd" missing.
4. Check that the licence is current. Under the Moneylenders Act 1951, a licence lasts for up to two years, and the start and expiry dates are written on it. A company that was licensed in the past is not necessarily licensed today. Licensed moneylenders must show the licence's validity date in their adverts. If you can't confirm that the licence is still valid, ask KPKT before you go ahead.
5. Check Bank Negara Malaysia's Financial Consumer Alert list. It names companies and websites that are not authorised or approved. If the lender appears there, stop.
6. Confirm the channel you are talking to. Even if the company is licensed, the person messaging you may not work for it. Find the company's phone number on its own official website, call that number and ask whether the person or WhatsApp number contacting you is theirs.

Write down what you found: company name, licence number, the date you checked and the number you called. If something goes wrong later, these notes are useful to the police, KPKT or your bank.

Brand name or company name: check the one that signs

Many lenders advertise under a brand name that differs from the registered company name, so the brand you see on Facebook may not appear on KPKT's list at all. What matters is the company that signs your loan agreement and pays the money into your account.

Ask one direct question: "Which licensed company will sign my loan agreement, and what is its licence number?" Then check that company. When the agreement arrives, make sure the lender named in it is the same company you checked. If the name on the agreement, the name on the list and the name of the account sending you money are all different, stop and ask why before you sign.

This applies to us too. AXAI Credit collects applications and connects you with an adviser. Your loan agreement is signed with our licensed lending partner, a moneylender licensed by KPKT under the Moneylenders Act 1951. Ask your adviser for the partner's company name and licence number, and check them on KPKT's list.

What the licence number in an advert tells you

Under the Moneylenders Act 1951, a licensed moneylender needs an advertisement permit from KPKT before it can advertise. According to KPKT, every advert must show:

• The licence number and how long the licence is valid
• The advertisement permit number
• The lender's name, business address and phone number
• The interest rate offered

Licence numbers usually start with "WL" and advertisement permit numbers with "WP". An advert with only a mobile number, a first name and promises such as "no documents, blacklist also can" is a strong signal that you are not dealing with a licensed lender. A licence number in an ad is a starting point, not proof: a scammer can print a real company's number on a fake ad. Check it with KPKT, then contact the company through its own official number, not the one in the ad.

Questions to ask before you share any documents

A licensed lender should be able to answer all of these clearly, in writing if you ask. Vague or evasive answers are a warning in themselves.

• What is your full company name and KPKT licence number?
• What is the annual interest rate, and is it charged on the reducing balance or on the original amount?
• Will any amount be deducted from the money I receive, or do I need to pay anything before payout?
• What is the total amount I will repay, and what is each instalment?
• What are the late payment charges?
• Can I settle early, and is there a penalty?
• Will I get a stamped copy of the signed agreement before the money is paid out?
• Which account will the money come from, and which account do I repay to?

For our loans the answers are on public pages you can check first: our rates are 4.9% a year for every term, on a reducing balance, and stay within the 18% a year cap for unsecured loans, there are no processing or admin fees, nothing is deducted from the payout, there is no early settlement penalty, and late charges are set out in the loan agreement.

What a licensed loan normally looks like

Knowing the normal path makes it easier to notice when something is off. With a licensed lender, you should expect:

1. An application and a credit check with your consent. You provide income documents such as payslips or bank statements, and the lender may check CCRIS and CTOS with your consent. Being asked for documents is normal. Being asked for your banking PIN or login is not.
2. A written offer and agreement before any money moves. The amount, rate, instalment and total repayable are stated. You sign, your identity is checked against your MyKad, and you keep a copy. See what ours contains on the loan agreement page.
3. Payout to your own bank account. The full amount goes to an account in your name. No cash handovers, no third-party accounts.
4. Repayments with a record. You pay the lender's company account by bank transfer, FPX or JomPAY, and each payment is recorded.

Red flags of an illegal lender (Ah Long)

Any one of these should make you stop and check more carefully. Several together almost certainly mean you should walk away.

• No written agreement, or an agreement you are not allowed to read or keep a copy of
• Upfront fees before the loan is paid out, such as a "deposit", "insurance" or "processing fee"
• Deductions at source, where you sign for RM 5,000 but receive much less
• Asking for your ATM card, bank PIN, online banking login or MyKad to keep as "security"
• Rates quoted per week or per month in a way that is hard to compare, such as "only 10% a week"
• "Guaranteed approval" or "no checks at all"
• Threats or pressure: deadlines of a few minutes, warnings that the offer will disappear, or demands for references to family members and your employer
• Contact only through WhatsApp, Telegram or a personal phone, with no company name or licence number you can verify
• Payments to a personal account, or a different account every time

For the scripts scammers use, read Spotting loan scams: 7 tricks to watch out for.

What the warning signs cost, in ringgit

Rates quoted per week and deductions at source are designed to hide the real cost. Two simple examples show how large the gap is. These are illustrations, not quotes.

Example 1: "only 10% a week". You borrow RM 1,000 from an unlicensed lender at 10% a week.

• Interest is RM 100 every week, so after four weeks you owe RM 400 in interest on top of the RM 1,000.
• 10% a week × 52 weeks is 520% a year, counted as simple interest on the original RM 1,000. That is before any compounding, "late fees" or rollovers, which push it higher still.

For comparison, the legal cap for unsecured licensed loans is 18% a year, which in practice is applied as simple (flat) interest on the amount borrowed. On RM 1,000 for one month (a twelfth of a year), that is RM 15.00 (RM 1,000 × 18% ÷ 12). On our short-term loan at about 0.0136% a day (4.9% a year), RM 1,000 for 30 days costs RM 4.08 in interest, so you repay RM 1,004.08 in one go.

Example 2: the deducted payout. You sign for RM 5,000 over 12 months at 4.9% a year on a reducing balance. The monthly instalment is RM 427.81 and the total repayable is RM 5,133.70. Now suppose RM 500 is deducted as a "processing fee" and only RM 4,500 reaches your account.

The advertised rate did not change, but because you repay a RM 5,000 loan while receiving RM 4,500, the real cost is about 25.1% a year on a reducing-balance basis, about five times the 4.9% in the advert. A licensed moneylender may not take a "processing fee" like this anyway: under the Moneylenders Act 1951 (section 23), the only costs it can pass on to you are stamp duty, fees required by law and legal costs. "Nothing deducted from the payout" matters as much as the headline rate.

Why licensing matters to you

A licence is not just paperwork for the lender. It gives you protections that an illegal lender will never offer.

A licence does not make every offer a good one. A licensed loan can still be too large for your income. Check the total repayable and that the instalment fits your budget, and use cheaper options first if you have them, such as savings or a family loan with clear terms.

Common mistakes when checking a lender

• Checking the brand instead of the company that signs. Check the name that will appear on your agreement.
• Treating an SSM certificate as a licence. Business registration is not permission to lend.
• Checking after paying a "fee". A licensed lender does not need money from you to release your loan.
• Sending documents before checking. Payslips, bank statements and MyKad copies are valuable to scammers. Share them only through a channel you have verified.

How to check it's really us

Scammers sometimes copy the names and logos of real companies. Our process is simple to recognise: you apply on our website (about three minutes), nothing is approved on the website itself, and an adviser continues with you on WhatsApp to confirm your identity and the offer before you sign with our licensed lending partner. We do not collect your IC number on the website, we do not send SMS or OTP codes, and there is no customer login. To check you are really talking to us:

• See our official channels page for our website, our official WhatsApp number and our hotline 011-2102 9366
• Ask for our lending partner's company name and licence number, and check them with KPKT (for example in the i-KrediKom app)
• Remember that we will never ask you to transfer money to a personal account, pay anything before payout, share your TAC or OTP, or install a screen-sharing app

If someone uses our name and anything feels wrong, stop replying and call 011-2102 9366. You can also raise a concern through our complaints page.

If you have already paid a fee or borrowed from an unlicensed lender

If you transferred money in the last few hours (for example an "upfront fee"), call the National Scam Response Centre on 997 and your bank straight away. The sooner the report is made, the better the chance the money can be traced.

If you have borrowed from an Ah Long:

• Keep every record: messages, receipts, account numbers, names and phone numbers
• Do not hand over more personal documents, bank cards or contacts
• Do not take a new loan from another unlicensed lender to pay the first one
• If you are threatened or harassed, or your home or workplace is targeted, make a police report and keep a copy
• Report the unlicensed lender to KPKT through its SISPAA complaints system (aduan.kpkt.gov.my), with your records

If you are struggling with several debts, speak to AKPK, the agency set up by Bank Negara Malaysia to help with debt management. Its counselling is free, and it can assess whether its Debt Management Programme suits you. Talking to AKPK before your situation gets worse is usually better than borrowing more.

Summary

• Get the full name and licence number of the company that will sign your agreement
• Look it up yourself with KPKT (the i-KrediKom app or KPKT's website) and check the BNM Financial Consumer Alert list
• Call the company on its own number to confirm who is contacting you
• Expect a written agreement, a rate within the legal cap, no upfront fees, no deductions and payout to your own account
• If you have paid a scammer, call 997 and your bank immediately

A licensed lender gives you a written agreement, a clear cost and somewhere to complain if something goes wrong. An Ah Long gives you none of that. If you want to borrow with us, start from our official channels or call 011-2102 9366.

This article is general information only and is not personal financial advice. Approval and loan amounts are subject to assessment and your loan agreement. How we write and check our guides