How to Verify if a Lending Company Is Legit in the Philippines: A Legal Guide to SEC Registration and Beyond

Updated for general Philippine practice. This is informational and not a substitute for legal advice tailored to your case.

I. Why verification matters

Borrowing from an unlicensed lender exposes you to abusive collection practices, unlawful fees, and unenforceable or void loan terms. Philippine law requires lenders to be authorized by the proper regulator before offering loans to the public. For most non-bank lenders, the primary regulator is the Securities and Exchange Commission (SEC).

II. First principles: who regulates whom?

Before you check a license, identify what kind of entity you’re dealing with—different regulators apply:

Banks, quasi-banks, pawnshops, and money service businesses → Bangko Sentral ng Pilipinas (BSP) supervision.
Insurance companies and HMOs → Insurance Commission (IC).
Cooperatives that lend to members → Cooperative Development Authority (CDA).
Microfinance NGOs lending to the poor → regulated under the Microfinance NGOs Act by the Microfinance NGO Regulatory Council (MNRC).
Lending companies and financing companies (non-banks that lend to the public) → SEC.

If the business is not clearly a bank/coop/insurer, treat it as a lending/financing company and apply the SEC checks in this guide.

III. “Registered with the SEC” vs. “Licensed to lend”: two different hurdles

A frequent source of confusion is the difference between corporate registration and a license to operate as a lender:

SEC Corporate Registration (CRN/CEN): proves only that a corporation exists as a legal entity.
SEC Certificate of Authority (CA): the actual license to operate as a lending company (under the Lending Company Regulation Act of 2007) or a financing company (under the Financing Company Act). No CA = no legal authority to lend, even if the corporation is duly registered.

Rule of thumb: A legit lender will be able to show both (a) SEC registration documents and (b) a valid, current Certificate of Authority covering each office/branch that solicits or grants loans.

IV. Lending vs. financing companies (and why the label matters)

Lending company – generally engages in granting loans from its own funds to the public. Historically subject to a lower minimum paid-in capital than financing companies and must be organized as a stock corporation (sole proprietorships are not allowed to engage in the lending company business).
Financing company – extends credit for activities such as consumer financing, commercial financing, or leasing, often tied to the acquisition of goods/equipment.

The compliance package is similar (SEC registration + CA), but disclosure obligations and prudential expectations can vary.

V. Step-by-step: how to verify legitimacy (SEC focus)

Gather the lender’s identifiers. Ask for:
- Registered corporate name (and any “doing business as” names),
- SEC Registration Number, and
- SEC Certificate of Authority (CA) Number (and the exact corporate name on that CA).
- Branch address where you applied.
Match names exactly. The name on the CA must exactly match the corporation’s registered name. Watch for “sound-alike” entities and minor spelling differences (a common scam).
Check the CA’s scope and status.
- The CA should specify Lending Company or Financing Company and indicate whether branches are covered or separately authorized.
- Look for validity statements or revocation annotations; a revoked/suspended CA means the firm cannot lawfully lend.
Confirm corporate existence & officers.
- Review the Articles of Incorporation and most recent General Information Sheet (GIS) to see the current directors/officers and principal office. Compare with the people dealing with you.
Verify required local/auxiliary registrations.
- Mayor’s/Business Permit for the specific branch.
- BIR registration and Authority to Print (official receipts/invoices).
- Data Privacy compliance (privacy notice; where applicable, National Privacy Commission registrations/notifications for processing personal and sensitive information).
If it’s an online lending app (OLA):
- The operator must still be an SEC-licensed lending/financing company with a valid CA.
- The app, website, and social media pages should clearly disclose the corporate name, SEC Reg. No., CA No., physical principal office, and contact details (not just a webform).
Cross-check for enforcement red flags.
- Ask the lender directly about any SEC revocation/suspension orders or show-cause directives, and request copies of compliance submissions if they claim prior issues were resolved.
- Search for public advisories and cease-and-desist orders (if you independently research later).
Keep copies. Save front-and-back scans of the CA, SEC certificate, permits, and the loan documents you’re asked to sign.

VI. What a compliant loan package should look like

Philippine statutes and rules require clear, conspicuous disclosures of the true cost of credit. In practice, expect at least:

Pre-contractual key facts: principal, term, all charges (interest, service/processing/platform fees, penalties, collection fees), amortization schedule, and effective interest rate.
Loan agreement: signed by an authorized officer (check the GIS/Secretary’s Certificate for signatory authority).
Disclosure statement (often separate): breaking down finance charges and the annualized rate, consistent with the Truth in Lending Act principles.
Official receipts for all payments and fees.
Privacy notice & consent consistent with the Data Privacy Act; no overbroad permissions like harvesting your contacts, photos, or messages without a lawful basis.

If the “disclosure” is a screenshot in tiny text or you’re told “we’ll send it after disbursement,” treat it as a red flag.

VII. Collection conduct: what’s clearly unlawful

Even licensed lenders must follow fair debt collection standards and financial consumer protection rules. Red flags include:

Harassment or shaming tactics (contacting your relatives, employer, or social media contacts; posting your photo; threats of arrest).
Unauthorized data use (scraping your phone contacts or gallery unrelated to loan servicing).
Misrepresentation (posing as police, court, or government officials).
Fees not disclosed up front, or unilateral interest increases mid-term.
Withholding your ID cards or documents as “security.”

Such acts can breach the Financial Consumer Protection framework, Data Privacy Act, Anti-Photo and Video Voyeurism Act (in egregious shaming cases), and even Revised Penal Code provisions on threats or coercion.

VIII. Common scams and how to spot them

“We’re SEC-registered” but no CA. They show an SEC registration certificate only. Insist on the CA.
Name spoofing. They flash a CA that belongs to another corporation with a similar name. Verify the exact corporate name and registration number.
Shell websites/apps. Slick UI, but zero corporate disclosures, no physical address, or only a PO box.
Pressure to disburse immediately if you pay a “verification” or “insurance” fee first. Legit lenders net off fees (if any) and reflect them in your disclosure/receipt.
Collections from a different entity you never contracted with. Your contract should identify the lender and any assigned collection agent; assignments must be documented and notified.

IX. Practical checklist (printable)

Identity & Authority

Exact corporate name and SEC Reg. No.
SEC Certificate of Authority (CA) number and copy
Branch address matches permits and CA scope

Corporate Documents

Articles of Incorporation (lending/financing purpose stated)
Latest GIS (verify signatories/officers)

Local & Tax

Mayor’s/Business Permit (current year)
BIR Registration; Official Receipts issued

Online Lending (if applicable)

App/website discloses corporate name, SEC Reg. No., CA No., physical office
Privacy notice and contact details for complaints

Loan Disclosures & Contracting

Key facts sheet with all charges and effective interest rate
Signed loan agreement; amortization schedule
Receipts for any upfront fees; disbursement breakdown

Conduct

No harassment/shaming; compliant data handling
Clear complaint and dispute channels

X. If things go wrong: remedies and reporting

Regulatory complaints:
- SEC (for lending/financing companies; particularly licensing violations, abusive collections by these companies).
- BSP (if the entity is a bank/pawnshop/MSB).
- CDA (cooperative lenders).
- National Privacy Commission (privacy abuses such as scraping contacts, doxxing).
Criminal/civil actions: Harassment, threats, or public shaming can ground criminal complaints; unlawful charges and abusive terms can support civil claims for damages and injunctions.
Evidence to preserve: screenshots of chats, call recordings (observe lawful recording rules), app permission prompts, the app’s store listing, copies of IDs requested, receipts, and the full contract set.

XI. Frequently asked “gray areas”

1) Are high interest rates automatically illegal? The Philippines no longer has a general usury cap, but lenders must comply with disclosure and fairness standards. Excessive, hidden, or misleading charges can still be actionable (e.g., as unfair or abusive practices). Some sectors (e.g., pawnshops, payday products) may face policy guidance on charges—ask the regulator that covers the product.

2) Can sole proprietors operate lending businesses? The lending company framework contemplates corporations, not sole proprietorships. If you encounter a “lender” using only a DTI business name, be extremely cautious—demand the corporation’s SEC documents and CA.

3) Is a payment gateway license enough? No. A payment processor’s authorization does not confer authority to lend. The borrower’s counterparty must itself be licensed (or fall under a different regulator like BSP/CDA/IC as appropriate).

4) The lender says the CA is ‘processing.’ Can they lend meanwhile? No. Soliciting or granting loans without a CA is generally prohibited. Lending during “processing” is a red flag.

XII. Documentation you can ask for (and how to read it)

SEC Certificate of Incorporation – check exact name, date, company number.
SEC Certificate of Authority – check type (Lending/Financing), issue/notation dates, and revocation/suspension stamps.
Secretary’s Certificate / Board Resolution – confirms the signatory’s authority to sign loan documents.
GIS – confirms current officers and principal office.
Permits & BIR – confirm current year validity and address match.

Match all corporate names across documents. Any mismatch warrants pause and clarification.

XIII. Contract hygiene tips before you sign

Compute the effective rate yourself using all fees, not just the “headline” interest. A 3% “interest” with 10% “processing” deducted upfront can imply a much higher cost.
Scrutinize penalty clauses and collection fees; they must be reasonable and previously disclosed.
Look for assignment/cessions clauses (who may collect, sell, or assign your loan) and your consent mechanics.
Ensure complaints and dispute channels are written, with response timelines.
Retain original copies or certified e-copies of everything you sign.

XIV. Bottom line

To confirm that a Philippine lending company is legit, you need both:

a valid SEC corporate registration, and
a current SEC Certificate of Authority to operate as a lending or financing company—plus proper disclosures, permits, and lawful conduct.

If any of these elements are missing or inconsistent, do not proceed. Choose another provider or seek legal advice.

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