04/02/2021
THE MONEY LENDERS ACT
MONEY LENDER LICENCING IN ZAMBIA
By Mazuba Banda Esq
The Money Lenders Act, CAP 398, regulates the business of money lending in Zambia and seeks to protect the public from the exploitative practices of shylocks.
1. It is a legal requirement that every person carrying on, or involved in, the business of lending money must take out a money lender’s licence, renewable annually.
2. The Act does not apply to lenders regulated by any other Act, such as Banks or building societies
3. A licence can only be given to someone with a money lender’s certificate, which certificate expires on 31st December.
4. Money Lenders are precluded from advertising their business, except in line with the advertising requirements under the Act
5. Money-lending transactions that do not conform to the requirements under the Act are illegal.
6. The lending agreement must be in writing and can only be enforceable if signed before the money is lent or the security given.
7. The Act prohibits the charging of compound and penal interest. However, a lender may charge default interest.
8. Borrowers have a right to all information pertaining to their borrowing
9. The Act prohibits the charging of interest in excess of 48 % per annum.
