Updated for general guidance; always cross-check the latest rules before relying on this for transactions.

1) Why verification matters

Micro-financing entities handle small, high-impact loans. Verifying a firm’s legal status protects borrowers, investors, and counterparties from (a) unlicensed lending, (b) abusive collection practices, and (c) void or unenforceable contracts. Philippine law requires specific primary and secondary authorizations—mere business permits are not enough.

2) Know the players: which law, which regulator?

Lending Companies – Governed by the Lending Company Regulation Act of 2007 (R.A. 9474) and its IRR. Regulated by the Securities and Exchange Commission (SEC). Must be organized as a corporation (no sole proprietors/partnerships).
Financing Companies – Governed by the Financing Company Act of 1998 (R.A. 8556) and rules of the SEC. Also corporations only.
Microfinance NGOs (MF-NGOs) – Governed by the Microfinance NGOs Act (R.A. 10693). They are typically non-stock corporations registered with the SEC and accredited by the Microfinance NGO Regulatory Council (MNRC). Not the same as lending/financing companies.
Cooperatives/credit cooperatives – Registered and supervised by the Cooperative Development Authority (CDA), not the SEC (though they may offer microfinance services).
Banks & microfinance-oriented rural/thrift banks – Licensed and supervised by the Bangko Sentral ng Pilipinas (BSP); not SEC-licensed for lending activity.

Implication: If the entity says it is a “microfinance company,” first identify which category it belongs to. SEC verification applies to lending/financing companies and SEC-registered NGOs; for banks check BSP; for coops check CDA; for MF-NGOs check MNRC accreditation.

3) The two SEC authorizations you must see (for lending/financing companies)

Primary registration – Certificate of Incorporation/Registration under the Revised Corporation Code (R.A. 11232).
- Confirms the entity exists and its corporate purpose includes lending/financing.
- Check corporate name, company number, date of registration, principal office, and directors/officers.
Secondary license – Certificate of Authority (CA) to Operate as a Lending/Financing Company issued under R.A. 9474 (lending) or R.A. 8556 (financing).
- This is the license that authorizes the business of granting loans.
- A company with only primary SEC registration cannot legally lend to the public.
- The CA shows the license type, issue date, sometimes expiry/validity or status, and may refer to the minimum paid-in capital compliance.

Rule of thumb: No CA, no lending. Refuse to transact or report to the SEC if the CA is absent, expired, suspended, or revoked.

4) How to verify—step by step

A. On-document checks (what the entity should show you)

SEC Certificate of Incorporation (primary). Confirm:
- Exact corporate name matches all receipts, websites, mobile apps, contracts.
- Purpose clause includes lending/financing (for stock corps) or microfinance for NGOs (non-stock).
- Directors/officers names—compare with those representing the company to you.
SEC Certificate of Authority (CA) (secondary).
- Type (Lending vs Financing) matches how the entity holds itself out.
- Status: not suspended/revoked; be wary of old or tampered copies.
- Registered office address and company number match other documents.
If operating online/mobile (“online lending platforms”):
- Ask for proof that the platform/app is duly registered/authorized and properly disclosed to the SEC (platform name, operator, data-privacy notices).
- Make sure the app name and developer/owner presented in stores/documents matches the SEC-registered entity.

B. Cross-checks you should perform (paper trail & governance)

Articles of Incorporation & By-laws – ensure lawful purpose and compliance with ownership rules, minimum paid-in capital, and any nationality limits applicable to lending companies.
General Information Sheet (GIS) – confirm current directors/officers/beneficial owners. Frequent unexplained changes are a red flag.
Business permits – Mayor’s/Barangay permit and BIR registration (Authority to Print ORs). These do not substitute for a CA but indicate local and tax compliance.
Regulatory compliance:
- AMLA: Lending/financing companies are covered persons; they must have AML/CTF policies, KYC, and report to the AMLC. Ask for onboarding/KYC procedures.
- Data privacy: They must register/process in line with the Data Privacy Act (NPC). Look for privacy notices and lawful consents.
- Consumer protection & collection practices: Confirm they have internal policies that prohibit harassment/shaming, and provide clear complaint channels.

C. For Microfinance NGOs

SEC: Non-stock corporation registration.
MNRC: Current accreditation (required to enjoy the 2% preferential tax on microfinance activities). Check the accreditation certificate and validity period.
Program focus: lending to poor and low-income clients with development services; verify program documents and client protection standards.

D. For Cooperatives/credit coops (not SEC)

Request the CDA Certificate of Registration, latest CDA Certificate of Compliance, and by-laws authorizing credit/microfinance services.

E. For banks

Ask for their BSP license and confirm they are offering microfinance products within their approved activities.

5) What to look for in the loan documents and disclosures

Interest and fees – Must be clearly disclosed (see Truth in Lending Act, R.A. 3765). Look for the annual percentage rate/effective interest, not just “daily” or “per cut-off” rates.
Repayment schedule – Dates, amounts, and computation basis (simple vs add-on).
Penalties/charges – Trigger events, caps, and compounding rules.
Collateral/assignment/auto-debit terms – Clear, specific, and authorized by the borrower.
Privacy consent – No blanket permission to access contacts/photos; only necessary data processing with explicit consent.
Collection policy – No threats, public shaming, or contacting unrelated third parties; reasonable call times; documented remediation steps.

Note on price caps: The SEC has issued circulars imposing interest/fee caps for small, short-term consumer loans. Thresholds and rates evolve; verify the current cap applicable to your loan size/tenor before closing.

6) Common red flags (treat any one as high risk)

Shows DTI certificate only or claims to be a sole proprietorship lending to the public (lending/financing companies must be corporations).
Cannot produce a SEC Certificate of Authority or the details don’t match the corporate name/app name/receipts.
Uses one corporate name on paper but a different brand/app without disclosure.
Harassing or shaming collection practices; demands to access your contacts/gallery as a loan condition.
“Guaranteed approval” with advance fees before release.
Extremely high “service fees” or add-ons that obscure the true cost of credit.
Refuses to issue official receipts or uses another entity’s receipts.
Revocation/Suspension rumors, but the firm cannot show a current CA.

7) Practical due-diligence checklist (borrowers, partners, investors)

Get clear, legible copies of: Certificate of Incorporation, Articles/By-laws, latest GIS, Certificate of Authority, business permits, BIR registration, AML and data-privacy policies.
Match names/addresses/company numbers across all documents, contracts, receipts, website, and app store listings.
Confirm officers/authorized signatories against the latest GIS or board resolutions.
If using an online lending platform, obtain the platform registration/disclosure details and ensure the platform’s legal owner is the same licensed entity.
Review standard loan agreements and truth-in-lending disclosures for transparency and alignment with caps.
Inspect collection scripts and escalation policies for compliance with fair-collection standards.
For MF-NGOs, secure MNRC accreditation copy and verify the program focus and client-protection commitments.
Keep a verification memo in your file (who you talked to, what you saw, dates, copies).

8) What to do if something looks wrong

Pause transactions. Ask for missing documents.
Document the discrepancy (screenshots, copies, dates).
Complain/Report:
- SEC (Enforcement and Investor Protection Department) – for unregistered/unauthorized lending, abusive collection, and violations of SEC rules.
- National Privacy Commission – for unlawful data harvesting, contact scraping, doxxing.
- AMLC – for suspected money laundering/terrorism financing.
- LGU/BIR – for local permit/tax irregularities.
Preserve evidence (texts, call logs, app permissions, payment proofs).

9) Special notes on ownership, capital, and structure

Corporate form is mandatory for lending/financing companies.
Minimum paid-in capital and ownership/nationality rules apply (these differ for lending vs financing companies and may vary by location/class of activity). Review the Articles, subscription schedules, and SEC capital confirmations.
Name style: Many licensed entities use a corporate name different from their brand; the license covers the corporation, not a marketing brand—disclosure must tie brand ↔ corporation.

10) Model clauses and requests you can make

Representation & warranty clause (for suppliers/partners):

“Counterparty represents and warrants that it holds a valid and subsisting SEC Certificate of Incorporation and Certificate of Authority to Operate as a [Lending/Financing] Company, and that all online platforms used to offer loans are duly registered/disclosed to the SEC; copies attached. Counterparty shall promptly notify of any suspension, revocation, or material regulatory action within 3 business days.”
Borrower’s document request (simple):

“Before I proceed, kindly send clear copies of your SEC Certificate of Incorporation, SEC Certificate of Authority, latest GIS, Mayor’s Permit, BIR COR, and your loan disclosure statement under the Truth in Lending Act.”

11) Quick FAQ

Q: Is an SEC primary certificate enough? A: No. You need to see the Certificate of Authority for lending/financing activity.

Q: The company is an NGO and says it does microfinance—no CA needed? A: If it’s an MF-NGO under R.A. 10693, look for SEC non-stock registration and MNRC accreditation. If it’s actually a lending/financing company, it needs a CA.

Q: The lender is a cooperative. SEC check still needed? A: No—verify with the CDA instead.

Q: The lender operates via a mobile app only. A: The corporation behind the app must be SEC-registered and CA-licensed, and the online platform must be properly disclosed/registered with the SEC. The app/developer identity should map to the licensed corporation.

12) Bottom line

To verify a micro-financing firm in the Philippines:

Identify the category (lending company, financing company, MF-NGO, coop, or bank).
For lending/financing companies: Demand both (a) SEC Certificate of Incorporation and (b) SEC Certificate of Authority.
Cross-check names, numbers, officers, addresses, and—if online—platform/app ownership and disclosures.
Ensure TILA-compliant disclosures, AMLA registration/KYC, data-privacy compliance, and fair-collection practices.
Treat any mismatch or missing CA as a major red flag and consider reporting to authorities.

If you want, I can turn this into a printable checklist or a one-page borrower handout.