News & Knowledge

關於《放債人條例》(第 163 章)

Interest caps lowered pursuant
to amendments to
the Money Lenders Ordinance


立法會於2022年10月26日通過了修訂《放債人條例》(第 163 章)的決議。








The Legislative Council (“LegCo”) passed a resolution to amend the Money Lenders Ordinance (Cap. 163)(the “MLO”) on 26 October 2022.

The amendment came into effect on 30 December 2022, with no retrospective effect.

Pursuant to the amendments, the statutory interest rate cap (“Excessive Rate”) will be lowered from 60% to 48% per annum; and the extortionate rate (“Extortionate Rate”) will be lowered from 48% to 36% per annum (together “Amended Interest Rate Limits”).

Additionally, there will be an amendment to schedule 3 of the MLO by removing specific references to the limit threshold amounts and cross-referencing to the relevant sections of the MLO that establish the amended interest rate limits.

Any existing loan arrangement entered into before 30 December 2022, which charges an interest rate above 48% per annum, will not need to be amended or reopened. However, lenders are advised to reconsider and lower the interest rate if they are extending or refinancing an existing loan arrangement that charges an effective interest rate higher than 48% per annum on or after 30 December 2022.

The previous interest rates were set in 1980. The interest rate environment and the money lending sector in Hong Kong have changed significantly since then. Therefore, the amendments were made to catch up with the changes and better protect the public interest.

The consequence for violating the Amended Interest Rate Limits under the MLO will remain the same. Lenders may be liable for criminal offences and penalties if the loan arrangement charged an interest rate above the Excessive Rate. Such a contract will also be unenforceable according to section 24(2) of the MLO. Further, under section 25(3) of the MLO, any agreement for the repayment of a loan or for the payment of interest on a loan in respect of which the interest rate above the Extortionate Rate shall be considered extortionate unless the court is satisfied that such rate is reasonable or fair. The Court may reopen an extortionate transaction and make orders that it thinks fit.

Anthony Marrin
Partner, H. Y. Leung & Co., LLP