On paper, a licensed moneylender extended 18 loans to a businesswoman totalling $1.55 million. In reality, only $128,000 was advanced to her over a one-year period.

The firm, Resource Credit, also imposed 10 per cent administrative fees based on the $1.55 million amount rather than the principal sum, a High Court judge said in his judgment yesterday as he ruled in favour of the borrower.

Ms Ang Ai Tee, 69, had gone to court to set aside a statutory demand - a precursor to bankruptcy proceedings - served on her by the moneylender. She has repaid nearly $212,000 but Resource Credit says she still owes about $136,000.

Justice Tan Siong Thye found that the company had contravened the Moneylenders Rules, which state that moneylenders cannot recover from borrowers any interest or fees exceeding the principal. In Ms Ang's case, the administrative fees amounted to about $196,000.

He also found that Resource Credit had infringed the Moneylenders Act by imposing excessive interest in the guise of administrative fees for loan refinancing. "The loan transactions as a whole are unconscionable and substantially unfair to the plaintiff," he said.

The decision means that Ms Ang has staved off bankruptcy for now. If the moneylender wants to pursue its claim, it can file a lawsuit against her for the matter to go for trial.

Singapore's moneylending regulatory regime was strengthened in October 2015 to protect borrowers. Among other things, interest and late fees were capped at 4 per cent a month and moneylenders were allowed to charge an upfront administrative fee of no more than 10 per cent of the principal.

After the rules came into force, moneylenders began offering short-term loans, charging borrowers administrative fees repeatedly to roll over the existing loan.

In Ms Ang's case, she began borrowing sums of between $30,000 and $60,000 from Resource Credit from January 2015. After the new rules kicked in, she was persuaded to borrow another $50,000, repayable the next day.

Ms Ang's lawyer, Mr Lee Ee Yang, said she was pressured into refinancing the loan 16 times. She paid a 10 per cent administrative fee each time. When she did not pay to refinance the loan in September last year, Resource Credit served a statutory demand on her.

In his judgment, Justice Tan noted that the administrative fee was meant to be one-off. But the moneylender circumvented this by imposing the fees more than once per month through the multiple refinancing loans.

The moneylender used loan refinancing to disadvantage Ms Ang, who was "in the defendant's clutches", said the judge.