The government will not lift the freeze on new licences for moneylenders despite the appeal from the Malaysian Licensed Moneylenders Association, Housing and Local Government Minister Chor Chee Heung said.

For the time being, the freeze was still on, he said, adding that there were 2,811 licensed money lenders in the country.

mca new cabinet member 180308 chor chee heung Chor ( right ) said in Kuala Lumpur that what was more important was for the licensed moneylenders to follow legal channels if they encountered problems in reclaiming the money.

He said the Moneylenders Act 1951 had been amended in order to impose a stiffer penalty of up to RM250,000 and three years' imprisonment for harassing borrowers.

So far, not less than 100 licences have been revoked or are in the process of being revoked pending the outcome of their cases in court, he said.

"If you charge a higher interest rate than permitted by the Act and force repayment through illegal tactics, you run the risk of being punished," he said.

However, Chor said many licensed moneylenders conducted their business in a proper way and adhered to the regulations.

Citing last year's statistics, he said loans amounted to RM4.2 billion were disbursed to companies and individuals.

"This showed that they have a role to play, especially for urgent bridging type of loans," he said.