LCQ6: Regulation of excessive borrowing by foreign domestic helpers
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Question:
It has been reported that many foreign domestic helpers (FDHs) incur debts arising from pre-departure training and intermediary fees before coming to Hong Kong, and then borrow excessively after arrival. In this connection, will the Government inform this Council:
(1) how the authorities will strengthen interdepartmental collaboration (including working alongside the Immigration Department, the Labour Department, the relevant Consulates General in Hong Kong and employment agencies) to step up publicity and education at source, so as to prevent FDHs from falling into traps involving overseas training fees and lending, and to regulate and prevent their excessive borrowing in Hong Kong;
(2) as the industry has reflected that only a small number of licensed money lenders are currently registered to interface with Credit Data Smart (CDS), of the specific measures the authorities have put in place to help small and medium-sized money lenders to overcome the technical barriers to system interfacing; whether an assessment has been made on whether strengthening the regulation of licensed money lenders will drive FDHs to resort to illegal lending; the specific interdepartmental mechanism for the law enforcement departments to combat illegal debt collection activities where FDH employers are harassed due to their FDHs' borrowing; and
(3) in respect of some licensed money lenders who are unwilling to interface with CDS or whose interfacing progress is lagging behind, of the penalties the authorities will impose on money lenders who fail or refuse to connect to the platform before the implementation of the second-phase measures, for example, whether the authorities will invoke the Money Lenders Ordinance to revoke their licences or impose additional licensing conditions?
Reply:
President,
To ensure the healthy development of the money lending market and safeguard public interest, the Government has over the years adopted a multi-pronged strategy to address the problems arising from borrowing. Last year, we conducted a public consultation on enhancing the regulation of licensed money lenders, and have been implementing the new regulatory measures in phases starting this year.
Having consulted the Labour and Welfare Bureau, the Security Bureau, the Companies Registry (CR), and the Hong Kong Monetary Authority (HKMA), our reply in response to the questions raised by the Hon Elaine Chik is as follows:
(1) Various policy bureaux and departments collaborate at different levels, each discharging their respective functions to address the issues arising from excessive personal borrowing in society. Following our public consultation, starting from August this year, we have imposed restrictions on unsecured personal loans granted by money lenders to low-income earners, including restrictions of income, debt servicing ratio, total outstanding loan amount and repayment period. We have also prohibited money lenders from requesting borrowers to provide loan referees.
The borrowing activities of individuals from outside Hong Kong, including foreign domestic helpers (FDHs), before coming to Hong Kong are subject to regulation by the respective governments elsewhere. In this regard, the Labour Department (LD) has established a regular liaison mechanism with the Consulates-General (CGs) of countries where the majority of the FDHs in Hong Kong come from. If organisations elsewhere are found to have engaged in malpractices in arranging FDHs to take up employment in Hong Kong (such as improperly coercing FDHs into taking out loans), LD will inform the relevant governments and request follow-up actions. The LD also strictly regulates employment agencies (EAs). The Code of Practice for Employment Agencies (CoP) promulgated by the LD stipulates that EAs should not provide job seekers with information relating to personal loans, and should not advise, arrange, encourage or force job seekers to borrow money from any institutions within or outside Hong Kong. EAs violating the CoP may have their licences revoked or their applications for licence renewal refused.
In addition, the Immigration Department (ImmD) has all along exercised stringent control when vetting employment visa applications from FDHs, by holistically considering multiple factors, including conduct and integrity, records provided by previous employers concerning the FDHs, and reasons for premature termination of employment contracts, etc. Previous FDH employers may provide the ImmD with reasons for premature contract termination, including excessive borrowing, for consideration by the ImmD when processing future applications for employment visas or extensions of stay from the FDHs concerned.
We acknowledge that publicity and education can contain problems at source. LD collaborates with the CGs of countries where the majority of the FDH in Hong Kong come from, and incorporates information on prudent financial management and avoiding excessive borrowing into orientation briefings organised for newly arrived FDHs. LD also distributes leaflets at FDH gathering places during holidays, and organises briefings for FDHs in collaboration with non-governmental organisations to explain common borrowing traps, repayment obligations, and channels for seeking assistance when facing financial difficulties.
(2) and (3) The Credit Data Smart (CDS) was established with the support of the HKMA as a platform for providing consumer credit information. After consulting the public, the Government will, starting from June 2027, introduce new licensing conditions to money lender's licence that require all money lenders engaging in unsecured personal loan business to provide, on a regular basis, personal credit information of their unsecured personal loan borrowers to the CDS. In addition, money lenders with total amounts of unsecured personal loans reaching $50 million or above, and money lenders with unsecured personal loans to borrowers whose monthly incomes are below $12,000, must join the CDS to obtain borrowers' personal credit information, thereby enhancing the affordability assessment. If a licensed money lender fails to comply with this requirement, CR will take regulatory actions depending on individual circumstances, including applying to the Licensing Court to revoke the licence or refuse the licence renewal application, etc. Carrying on business in breach of licensing conditions is an offence under the Money Lenders Ordinance (Cap. 163), which carries criminal sanctions.
The Government acknowledges that individual money lenders may not immediately have the capability to meet the technical requirements for joining the CDS. In view of this, with the support from the Government, the CDS platform operator has successfully launched a simplified version for money lenders. Service agencies under the CDS will handle the relevant vetting and due diligence work, and the fees are lower than those for other CDS members. The service support agent of the CDS has also set up a technical hotline and will organise seminars for the sector, to introduce the onboarding procedures for connecting to the CDS and address queries.
From the launch of the public consultation on enhancing the regulation of licensed money lenders in June 2025 to the implementation of the requirement to join the CDS in June 2027, there is a period of nearly two years for the industry to make preparations. I would like to take this opportunity to appeal to money lenders that have not yet applied to join the CDS to submit their applications as soon as possible, so as to prepare early for complying with the licensing conditions and avoid a last-minute rush of applications.
Currently, there is no evidence suggesting that enhancing the regulation of licensed money lenders has led to low-income earners (including FDHs) generally turning to illegal loans. Indeed, the enhancement in regulatory measures would not prohibit any personal borrowing by FDHs, as long as such borrowings comply with the laws and regulations, and the licensed money lenders comply with the licensing conditions before granting loans. As for loan-sharking syndicates and illegal debt collection activities, they have all along been criminal offences in Hong Kong. The Police have attached great importance to combating such crimes, and will actively conduct cyber patrols and carry out intelligence-led enforcement actions. In the first three quarters of this year, the Police carried out a total of nine large-scale arrest operations to combat such activities. CR and the Police have also established a mechanism to maintain close communication and exchange intelligence in respect of money lender regulatory matters, in order to enhance enforcement effectiveness.
Thank you, President.
Ends/Wednesday, October 21, 2026
Issued at HKT 15:20
Issued at HKT 15:20
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