The Philippines has seen an explosion of lending companies over the past decade, particularly online lending platforms and mobile apps. While many provide legitimate access to credit, hundreds of illegal operators have also emerged, engaging in predatory practices, exorbitant interest rates, harassment, blackmail, and unauthorized access to personal data. Borrowers have suffered severe financial and psychological harm, with some cases leading to suicide due to public shaming tactics.

Verifying the legitimacy of a lending company before borrowing is not just good practice—it is a legal necessity and a fundamental consumer protection measure under Philippine law.

I. Legal Framework Governing Lending Companies

Republic Act No. 9474 (Lending Company Regulation Act of 2007) and its Implementing Rules and Regulations (SEC Memorandum Circular No. 18, series of 2019, as amended)
This is the primary law governing lending companies. It defines a lending company as any corporation engaged in granting loans from its own capital or funds sourced from not more than nineteen (19) persons.
All lending companies must:
- Be registered with the Securities and Exchange Commission (SEC) as a corporation
- Obtain a Certificate of Authority (CA) to operate as a lending company
- Maintain a minimum paid-up capital of ₱1,000,000.00
- Comply with reportorial requirements and submit audited financial statements annually
Republic Act No. 8556 (Financing Company Act of 1998), as amended
Financing companies (which include most online lending platforms that source funds from the public) are also under SEC supervision with higher capital requirements (₱10 million minimum for new applicants as of 2025) and stricter rules on fund sourcing.
Truth in Lending Act (Republic Act No. 3765)
Requires full disclosure of the effective interest rate, finance charges, penalties, and total amount to be paid before contract perfection.
Data Privacy Act of 2012 (Republic Act No. 10173)
Legitimate lenders must be registered with the National Privacy Commission (NPC) and may only collect, process, and share personal data with explicit consent and for legitimate purposes.
Republic Act No. 11765 (Financial Products and Services Consumer Protection Act of 2022)
Strengthens consumer protection and imposes heavier penalties for abusive debt collection practices.
Bangko Sentral ng Pilipinas (BSP) Regulations
Banks, quasi-banks, pawnshops, and money service businesses fall under BSP supervision—not SEC. A company claiming to be a “bank” or offering deposit-like products without BSP license is illegal.

II. Types of Entities That May Legally Lend Money in the Philippines

Type of Institution	Regulatory Body	Minimum Capital (2025)	May Source Funds from Public?
Banks	BSP	₱3–20 billion	Yes
Financing Companies	SEC	₱10 million	Yes
Lending Companies	SEC	₱1 million	No (max 19 lenders)
Pawnshops	BSP	Varies by municipality	No
Cooperatives (credit coops)	CDA	Varies	Yes (members only)
Microfinance NGOs	SEC or CDA	Varies	Limited

If the company does not fall under any of these categories, it is operating illegally.

III. Step-by-Step Guide to Verify Legitimacy (2025 Updated Process)

Step 1: Check SEC Registration and Certificate of Authority
Visit https://www.sec.gov.ph/lending-companies-and-financing-companies-2023/ or the latest list at https://www.sec.gov.ph/lfc-list/

Search the “List of Registered Lending Companies” and “List of Registered Financing Companies” (updated monthly).
Verify that the company has a valid Certificate of Authority (CA). Registration as an ordinary corporation is NOT enough; it must have specific CA to operate as a lending/financing company.
Download and cross-check the SEC Registration Number and CA Number on the company’s website or app.

Step 2: Verify on the SEC Online Verification Portal
Go to https://seccheck.sec.gov.ph/
Enter the exact company name or SEC registration number. The portal will show whether the company is active, suspended, revoked, or has pending cases.

Step 3: Check the SEC Advisory Page for Blacklisted/Flagged Entities
Visit https://www.sec.gov.ph/advisories-2023/ or https://www.sec.gov.ph/warnings/
SEC regularly publishes lists of entities operating without authority, entities with revoked CAs, and illegal online lending apps.

Step 4: Confirm NPC Registration (for online lenders)
Go to https://privacy.gov.ph/data-privacy-registration/
Search for the company name. All legitimate online lending platforms must be NPC-registered.

Step 5: Verify Physical Office
Legitimate lending/financing companies must maintain a physical office in the Philippines (required under SEC rules).
Use Google Maps Street View or visit the address listed in the SEC registration. Many illegal apps use fake or virtual addresses.

Step 6: Check Business Permit and BIR Registration
Ask for a copy of their latest Mayor’s/Business Permit and BIR Certificate of Registration (COR). Cross-check the TIN on the BIR website (https://www.bir.gov.ph/).

Step 7: Review the Loan Agreement Against the Truth in Lending Act
A legitimate lender will provide a disclosure statement showing:

Amount financed
Finance charges
Effective interest rate (annual percentage rate)
Total amount to be paid
Schedule of payments
Penalty clauses

If they refuse to provide this before you sign, walk away.

IV. Common Red Flags of Illegal Lending Companies (2025)

Not found in SEC’s official list of registered lending/financing companies
Offers “no collateral, 5-minute approval, no credit check” with extremely high interest (e.g., 30–50% per month)
Requires upfront processing/legal/insurance fees before loan release (illegal under RA 9474)
Asks for access to phone contacts, gallery, or messages as “security”
Uses harassment, public shaming, or threats when collecting (criminal under RA 10175 Cybercrime Act and RA 11765)
Operates only through mobile app with no physical office
Uses generic or newly created Facebook pages with paid ads
Company name includes words like “Cash,” “Lending,” “Loan” but is not in SEC list
Interest rate not disclosed upfront or hidden in fine print

V. What to Do If You Suspect an Illegal Lender

File a complaint with the SEC via email: sec-emo@sec.gov.ph or through the SEC eSPARC online platform
Report to the National Privacy Commission if personal data was misused (https://privacy.gov.ph/complaint/)
File a cybercrime complaint with the PNP Anti-Cybercrime Group or NBI Cybercrime Division for harassment/blackmail
File with the Department of Trade and Industry (DTI) for unfair trade practices
Seek assistance from the Public Attorney’s Office (PAO) for criminal/civil action

Under RA 11765, consumers may recover actual damages, moral damages, exemplary damages, and attorney’s fees from abusive lenders.

VI. Special Note on Online Lending Applications (2025 Status)

As of December 2025, the SEC has approved only around 200+ online lending platforms out of thousands that previously operated.
The SEC now requires all online lending platforms to:

Be registered as financing or lending companies
Use only SEC-approved third-party collection agencies
Prohibit access to phone contacts/gallery
Cap effective interest rates (although usury is technically suspended, SEC imposes reasonableness standards)

Any app not in the current SEC list is operating illegally, and borrowing from it carries extreme risk.

Conclusion

Verifying a lending company in the Philippines is straightforward and takes only 10–15 minutes using the SEC website. There is absolutely no excuse for borrowing from an unregistered entity in 2025—doing so exposes you to predatory rates, harassment, and potential criminal liability for aiding an illegal enterprise.

Always remember: If a lender is legitimate, they will have no problem proving it. If they become defensive or evasive when asked for SEC Certificate of Authority, walk away immediately.

Protect yourself by dealing only with SEC-registered and authorized lending or financing companies. Your financial safety and peace of mind depend on it.