Mauritius offers a conducive environment for global business, including money lending activities. A Global Business Company (GBC) can engage in money lending within Mauritius by acquiring a Money Lending Licence issued by the Financial Services Commission (FSC). This guide provides an in-depth analysis of the setup process, regulatory requirements, benefits, and operational considerations for a GBC holding a Money Lending Licence in Mauritius.
Understanding a Money Lender
According to the Financial Services Act (FSA), a moneylender is defined as a person, other than a bank or a non-bank deposit-taking institution, whose business involves lending money in Mauritius. This includes any entity that advertises or represents itself as a moneylender, regardless of whether the money comes from their own sources or other means.
Regulatory Framework
The regulation of money lending activities in Mauritius has evolved significantly. Initially governed by the Money Lenders Act of 1960, the regulation was transferred to the Banking Act 2004 and finally consolidated under the Financial Services Act 2007. This shift has placed non-bank money lending under the purview of the FSC.
Eligibility for a Money Lending Licence
Only a company can apply for a Money Lending licence in Mauritius. Where a company is established as a Global Business Company (GBC), it must obtain this licence if it intends to offer money lending services in Mauritius. However, a GBC engaged solely in money lending activities outside Mauritius is exempt from this requirement.
Application Process
The application for a Money Lending Licence involves several steps and requires comprehensive documentation. The key steps include:
- FSC One Platform: Applications must be submitted through the FSC One platform.
- Documentation: Required documents include the business plan, constitution, internal procedures, compliance manual, AML policy, risk management policy, and disaster recovery and business continuity plan.
- Capital Requirements: The minimum stated unimpaired capital for a Money Lending Licence is MUR 30,000,000 or 5% of the total liabilities, whichever is higher.
Detailed Operations Plan: The application must provide detailed information about the money lending operations, including client onboarding, risk profiling, credit assessment, approval processes, and disbursement procedures
Operational Considerations
A GBC holding a Money Lending Licence must implement robust operational frameworks, including:
- Client Onboarding and Risk Profiling: Establishing procedures to assess and manage client risk profiles.
- Credit Assessment and Approval: Detailed processes for credit assessment, rating, approval, and documentation.
- Interest Rate and Fees: Clear guidelines on interest rates and fees, including the basis for their calculation.
- Collateral and Repayment: Procedures for managing collateral and repayment schedules
Establishing a GBC holding a Money Lending Licence in Mauritius involves a comprehensive application process, compliance requirements, and strategic operational planning. However, the benefits, including access to the African market (including Mauritius), favourable tax incentives, and a strong regulatory framework, make Mauritius an attractive destination for global money lending activities. By adhering to the guidelines and leveraging the advantages offered, a GBC can successfully engage in money lending and contribute to the financial ecosystem in Mauritius and beyond.
