A Money Lender is someone who lends small amounts of money at a higher rate of interest. The reason for charging higher rates of interest is that the money lender faces a higher risk of default than normal banks due to various reasons. People who are desperately in need of money but at the same time do not have a bank account, people with bad credit histories and those who can’t get money from friends or relatives approach a money lender for credit facilities.
In India, money lenders are governed by the Money Lenders Act in different states. The Tamil Nadu Government controls the money lending process in accordance with the Money Lenders Act, 1957. It is mandatory for every money lender to have a license. In this article, we look at the procedure for obtaining money lender license.