What Changed
- Enforced restrictions on unsecured personal loans for low-income earners, including limits on income, debt ratios, loan caps, and a ban on loan referees starting August 2026.
- Mandated Credit Data Smart (CDS) credit data sharing and mandatory joining for lenders with $50M+ in unsecured loans or lending to borrowers earning under $12,000 monthly starting June 2027.
- Established strict legal penalties under the Money Lenders Ordinance (Cap. 163), including potential licence revocation by the Licensing Court for non-compliance.
On October 21, 2026, Hong Kong SAR's Under Secretary for Financial Services and the Treasury, Mr Joseph Chan, delivered a Legislative Council reply detailing government measures to address excessive borrowing by low-income earners, including foreign domestic helpers (FDHs), and outlining mandatory compliance requirements for licensed money lenders.
**Restrictions on Unsecured Personal Loans**
Following a public consultation launched in June 2025, the Government introduced phased regulatory measures. Starting in August 2026, restrictions were placed on unsecured personal loans granted to low-income borrowers. These include requirements regarding borrower income, debt servicing ratios, total outstanding loan amounts, and repayment periods. Additionally, money lenders are prohibited from requesting borrowers to provide loan referees.
**Mandatory CDS Integration by June 2027**
Starting in June 2027, the Companies Registry (CR) will attach new licensing conditions requiring all money lenders offering unsecured personal loans to regularly supply borrower personal credit information to Credit Data Smart (CDS). Money lenders managing total unsecured personal loan portfolios of $50 million or above, or offering unsecured personal loans to borrowers earning below $12,000 monthly, must join CDS to obtain credit data for affordability assessments.
Failure to comply with licensing conditions is an offence under the Money Lenders Ordinance (Cap. 163), carrying criminal sanctions. Depending on the circumstances, the CR may apply to the Licensing Court to revoke or refuse the renewal of licences. To assist small and medium-sized lenders, a simplified version of CDS with lower service fees and technical assistance has been made available.
**Interdepartmental Coordination and Overseas Recruitment**
The Labour Department (LD) strictly enforces the Code of Practice for Employment Agencies (EAs), prohibiting EAs from providing loan information or coercing job seekers into taking loans within or outside Hong Kong. Violators face licence revocation. Furthermore, LD maintains regular communication with Consulates-General and incorporates financial education into FDH orientation briefings, while the Immigration Department factors premature contract terminations due to excessive borrowing into visa evaluations.
Who May Be Affected
Licensed money lenders, low-income personal loan borrowers, foreign domestic helpers, employment agencies, and credit reporting operators in Hong Kong SAR.
Cross-Border Context
Affects foreign domestic helpers recruited from overseas to Hong Kong SAR and regulates cross-border recruitment and lending practices in coordination with relevant Consulates-General.
What to check next
- Monitored rollout and onboarding updates from the Credit Data Smart (CDS) platform operator for money lenders.
- Guidance issued by the Companies Registry on licensing conditions enforcement under the Money Lenders Ordinance (Cap. 163).
This article provides general information and does not constitute legal advice. Consult the official text and obtain advice appropriate to your circumstances where needed.