Verifying the SEC Registration of an Online Lending Company in the Philippines
A practitioner-oriented legal guide (updated to June 2025)
1. Why Verification Matters
Online lending apps (“OLPs”) have become a fast, convenient source of micro-credit, but they also attract fraudsters. Under Philippine law, no entity may engage in the business of granting loans to the public unless it:
- Is organized as a corporation and registered with the Securities and Exchange Commission (SEC); and
- Holds a Certificate of Authority (CA) from the SEC specifically authorizing it to operate as a Lending Company under Republic Act No. 9474 (the Lending Company Regulation Act of 2007, “LCRA”).
Operating without a CA is a criminal act punishable by up to ₱50,000 fine and ten (10) years’ imprisonment, on top of SEC administrative penalties, civil damages, and possible BSP sanctions if interest-rate caps are breached.
2. The Regulatory Framework (Key Statutes & Issuances)
| Instrument | Core Rules Relevant to Online Lending |
|---|---|
| RA 9474 (LCRA, 2007) | Requires SEC CA; caps foreign equity at 49 % for lending companies; imposes ₱1 million minimum paid-in capital in Metro Manila (₱250k elsewhere); sets criminal penalties. |
| RA 8556 (1998) | Alternative regime for “financing companies” (larger loan sizes & commercial financing). |
| RA 11232 (2019) – Revised Corporation Code | Governs incorporation, reportorial compliance, revocation, and dissolution. |
| SEC Memorandum Circular (MC) 10-2019 | Defines “online lending platform” (OLP) and requires separate SEC registration of every app/website. |
| SEC MC 18-2019 | Bans abusive debt-collection practices (harassment, public shaming, threats). |
| SEC MC 19-2019 | Prescribes OLP registration procedure and mandatory disclosures inside the app (company name, CA number, interest, fees, privacy notice). |
| SEC MC 28-2020 | Orders corporations to register official email/address and use them for all SEC notices. |
| BSP Circular 1133-2021 | Caps interest and penalties on consumer loans ≤ ₱10,000 (6 % nominal monthly interest; 15 % effective interest; 5 % monthly penalty). Applicable to lending companies by reference. |
| Data Privacy Act (RA 10173) | Requires lawful, proportional collection of personal data; prohibits scraping contacts without consent. |
| Truth in Lending Act (RA 3765) & BSP Reg. X | Mandates disclosure of finance charges and effective interest rate. |
(The SEC periodically issues supplemental circulars; lenders must monitor the latest issuances.)
3. Registration Requirements in Detail
Incorporation
- File Articles of Incorporation with the SEC’s Electronic Simplified Processing of Applications for Registration of Companies (eSPARC).
- Minimum paid-in capital: ₱1 million (NCR), ₱250 k (elsewhere).
Certificate of Authority to Operate as a Lending Company
- Separate application within 30 days after incorporation.
- Key submissions: Business plan, AML/CFT manual, sworn undertaking to comply with MC 18-2019, police & NBI clearances of directors/officers.
Online Lending Platform (OLP) Registration
- Each mobile app/website requires its own approval and Control Number under MC 10 & 19-2019.
- Lender must show proof of IP ownership or contract with the developer, and a functional demo to the SEC’s Corporate Governance and Finance Department (CGFD).
- Updates (re-branding, new APK, new domain) must be reported within 10 days.
4. Step-by-Step: How to Verify an Online Lender’s SEC Status
| Step | What to Check | How to Do It |
|---|---|---|
| 1. Inspect Physical Certificates | • SEC Certificate of Incorporation (shows SEC Registration No.) • SEC Certificate of Authority (CA No. & date) |
A legitimate lender readily provides PDF scans or hard copies. Verify the CA number matches the corporate name. |
| 2. Cross-check the SEC Public Lists | • “List of Registered Lending Companies with Valid CA” (Excel/PDF, updated at least quarterly) • “List of Financing Companies” |
Download from sec.gov.ph > Resources > Notices and Announcements > Lending Companies. (No account needed.) |
| 3. Use the SEC CheckApp (Android / iOS) | • Search by corporate name, trade name, or CA No. • View list of approved Online Lending Platforms. |
The app returns “Registered,” “Revoked/Expired,” or “Unregistered.” It links to any SEC Advisory or Cease-and-Desist Order (CDO) against that entity. |
| 4. Pull Official Documents (optional) | • Articles, CA, General Information Sheet, Audited FS | Request via SEC Express System or over-the-counter. Fees apply but documents are conclusive. |
| 5. Check for SEC Advisories / CDOs | • Enforcement actions indicate illegal operation. | The SEC posts Advisories and Orders on its website and Facebook page. Look for docket numbers (e.g., “EIPD-CDO-2024-012”). |
| 6. Confirm Reportorial Compliance | • Latest General Information Sheet (GIS) filed? • Audited FS on record? |
Non-filing for 3 consecutive years is grounds for revocation under RA 11232. |
Red Flags:
- Lender shows only a DTI business-name certificate (irrelevant).
- CA issued to a different company name than the one on the app.
- CA marked “Expired” — CAs must be renewed every three (3) years.
- No OLP registration number inside the app/website.
- App requests contact lists or photo gallery access unrelated to loan processing.
5. Consequences of Dealing with an Unregistered Lender
| Violation | Primary Liability | Typical SEC Action |
|---|---|---|
| Operating without CA | Criminal: up to 10 years’ imprisonment; ₱50 k fine (RA 9474 §12). | Cease-and-Desist Order; Asset freeze; Website/app blocking via NTC; ₱1 M admin fine plus ₱10 k/day. |
| Unregistered OLP | Administrative: Revocation of CA; fine up to ₱200 k per unregistered platform. | De-listing from Google Play & App Store through coordination with DICT/NTC. |
| Abusive Collection | Administrative fine up to ₱1 M; suspension/revocation of CA. | Public advisory, possible criminal charges for libel, threats, or data-privacy violations. |
Borrowers may still be civilly liable for the principal loan amount, but illegal interest and fees are void. Courts have repeatedly applied the pari delicto doctrine to deny collection suits by unregistered lenders.
6. Borrower Remedies & Complaint Channels
SEC Enforcement and Investor Protection Department (EIPD) Email: eipd@sec.gov.ph · Tel.: (+632) 8818-6047 File a Verified Complaint (form available online) attaching screenshots, contracts, and proof of harassment.
National Privacy Commission (for contact scraping, doxxing).
Bangko Sentral ng Pilipinas – Consumer Assistance Mechanism (interest-cap violations).
NBI Cybercrime Division / PNP-ACG (threats, cyber-libel).
7. Best-Practice Checklist for Borrowers
✅ Confirm both SEC Registration Number and CA Number.
✅ Look up the lender on SEC CheckApp and the OLP approved list.
✅ Read the in-app Privacy Policy and Disclosure Statement (required by RA 3765).
✅ Compare total cost against the BSP 6 %/15 % cap if the loan is ≤ ₱10 k.
🚩 Walk away if the lender:
- demands upfront “processing fees,”
- threatens to contact your employer or Facebook friends, or
- offers suspiciously low interest only to add hidden “service charges.”
8. Compliance Tips for Legitimate Start-ups
- Capitalization & Ownership – Foreigners may own up to 49 %; higher foreign equity reclassifies the entity as a Financing Company (subject to RA 8556).
- AML/CFT – Register as a Covered Person with the Anti-Money Laundering Council (AMLC) and submit CTR/STR reports.
- Cyber-security – Implement multi-factor authentication and encryption at rest to meet SEC’s Technology Risk Management expectations.
- Marketing – All ads must display the corporate name, CA No., and OLP Control Number.
- Renewals – File CA renewal not later than 60 days before expiry; pay the ₱10,000 renewal fee plus documentary stamps.
Failure to renew automatically places the company on the “Delinquent” list, triggers app-store takedown requests, and exposes directors to personal liability.
9. Recent Enforcement Trends (2023 – 2025)
App-Store Coordination. In 2023 the SEC signed an MOU with Google and Apple to require a valid CA and OLP Control Number before an app goes live. Over 250 illegal APKs were removed in 2024.
Interest-Cap Audits. Joint SEC-BSP sweeps now sample actual loan ledgers. Companies exceeding the 6 %/15 % cap risk immediate CDOs.
Name-Cloning & ID Theft. The SEC’s 2025 pilot of a QR-coded Digital CA makes it harder for scammers to fake certificates; scan reveals real-time status.
10. Conclusion
Verifying an online lender’s SEC registration is no longer optional; it is the borrower’s first line of defense and the entrepreneur’s badge of legitimacy. The process is straightforward—check the certificate, the CA, and the app listing—but skipping it can lead to criminal prosecution for operators and financial ruin for borrowers. With the SEC’s digital tools, interest-rate caps, and aggressive enforcement in 2025, compliance is attainable and fraud increasingly costly. When in doubt, walk away or report—the law is squarely on the side of informed consumers.