Central Bank moves to put 144% limit on borrowing costs imposed by moneylenders
BELIZE CITY, Thurs. Aug. 28, 2025
The leak of a proposed amendment to the Moneylenders Act, Chapter 260, Revised Edition 2020 of the Substantive Laws of Belize has stirred public discussion and shed light on the true annual cost of borrowing from moneylenders, which include pawn shops, quick loan businesses and micro credit institutions. As the law currently stands, the effective annual interest rate, or the total cost of borrowing—including interest rate and any mandatory fees or charges – can climb to a staggering 240%. These fees and charges include late interest (applied to overdue principal), loan processing fees, service charges (such as administrative costs, document handling or account maintenance), and default fees (including penalties for missed payments or breach of contract) and other prescribed fees. The intention with the proposed amendment is to reduce the “all-in” threshold in the actual cost of borrowing to 144% annually.
The Central Bank of Belize (CBB) in its role as Registrar of moneylenders, is spearheading the proposed amendments to the Moneylenders Act. We have been told that the draft has not yet reached Cabinet in its final form. Consultation is ongoing, but a misrepresentation of the proposed changes with related amendments to the regulations prompted the Central Bank to issue a release clarifying the contents of the draft bill. The version eventually tabled to Cabinet may differ from the draft now being circulated.
The Central Bank explains that the existing legislation allows moneylenders to charge up to 48% in interest per annum PLUS 16% per month in fees and charges (or a total of 192% per annum in fees and charges). This is what adds up to that 240%. An official we spoke with called the figure unconscionable. The Central Bank states, “The proposed amendments introduce a consolidated cap on total interest, fees, and charges to a single rate of 144% per annum, almost half the total allowable limit currently in place. This single rate enhances transparency for borrowers and brings greater clarity to the cost of borrowing.” Additionally, the draft bill and regulations will require that moneylenders provide standardized disclosures to a borrower including “a breakdown of interest, fees, charges, total repayment, penalties and annualized percentage rate, among others, prior to loan acceptance.” Changes are also being proposed on enforcement actions and penalties against unlicensed and/or non-compliant moneylenders. Overall, the Central Bank asserts that the proposed amendments are intended to ensure fair play, transparency and protection for consumers from “excessive and predatory lending practices.” We note that the existing act imposes a fine of up to $50,000 or imprisonment of up to one year, or both, for the offence of imposing fees, costs, charges and expenses outside of what the law prescribes. The amendment proposes an administrative fine not exceeding five thousand dollars for each day the moneylender remains in violation of the law.
One observer pointed to the proposed deletion of clause 13 in the existing regulations which states: “Notwithstanding regulations 10, 11 and 12, a licensee shall not in respect of a loan to a borrower, recover from that borrower, interest, late interest or any fee or charge permitted under this or any other enactment, which in aggregate exceeds the principal of the loan.” They say that removing this clause and replacing it with a consolidated cap of 144% total interest, fees and charges would still amount to an increase. However, officials countered that moneylenders have not been adhering to the existing regulation.
The Moneylenders Act defines a moneylender as “a person who engages in moneylending business,” and the latter means “extending credit that is subject to interest or finance charges and this includes pawnbroking…” Excluded as a moneylender are statutory bodies, friendly societies, banks and insurance companies, businesses who lend money though their primary purpose is not moneylending, licensed financial institutions under the Domestic Banks and Financial Institutions Act, credit unions and cooperative societies, and entities licensed by the International Financial Services Commission to issue short-term, small unsecured loans.
Under the provisions of the Moneylenders Act, the Registrar is required to maintain a Moneylenders Register. As of now, a total of 57 moneylenders are licensed in Belize.
We reached out to Perry Gibson, president of the Belize Money Lenders Association for comment. He told us that consultations are still in their early stages, and they will therefore hold off on discussing the proposed amendments at this time.
