Verifying SEC Registration of Lending Companies in the Philippines
A comprehensive legal guide for consumers, investors, and practitioners (updated to July 2025)
1. Overview
Unscrupulous “lending” outfits—especially those that operate solely through mobile apps—have proliferated in recent years. Before transacting, borrowers and investors alike must confirm that the entity holds BOTH:
- A Certificate of Incorporation (CI) – proof that it is a registered domestic corporation under the Revised Corporation Code (R.A. 11232); and
- A Certificate of Authority (CA) to Operate as a Lending Company – issued by the Securities and Exchange Commission (SEC) under the Lending Company Regulation Act of 2007 (R.A. 9474).
Operating without a CA, or continuing to operate after suspension or revocation, is a criminal offense. Below is everything you need to know—statutory basis, procedural steps, red‑flag indicators, remedies, and recent regulatory updates—when verifying a Philippine lending company’s legitimacy.
2. Legal Framework
| Statute / Regulation | Key Provisions Relevant to Verification |
|---|---|
| R.A. 9474 (Lending Company Regulation Act) | Requires any person/corporation engaged in “granting loans from its own funds” to secure an SEC CA; sets ₱1 million minimum paid‑in capital and the penalty regime (Sec. 12 & 20). |
| IRR of R.A. 9474 (2008; last amended 2018) | Details application requirements, display of CA in every business location, quarterly reporting to SEC – CRMD. |
| SEC Memorandum Circular (MC) No. 18‑2019 | Imposes fair collection and data‑privacy obligations on online lending operators; violation is ground for CA revocation. |
| SEC MC No. 19‑2019 | Caps permissible personal data collection to borrower’s basic contacts; prohibits “contact scraping” of borrowers’ phonebooks. |
| SEC MC No. 10‑2021 | Registration of Online Lending Platforms (OLP). All lending companies that market or disburse loans through a website or mobile app must register each OLP and submit app‑store screenshots. |
| Financial Products and Services Consumer Protection Act (R.A. 11765, 2022) | Gives SEC enhanced power to issue cease‑and‑desist orders (CDOs) and administrative fines up to ₱2 million plus ₱200 k per day of continuing violation. |
| Data Privacy Act (R.A. 10173) | Works in tandem with SEC rules; harassment via misuse of personal data can subject an erring lender to NPC sanctions in addition to SEC penalties. |
Financing vs. Lending Companies: Financing companies (R.A. 5980 as amended by R.A. 8556) provide credit by acquiring receivables (e.g., factoring, installment sales) and need a separate CA. Verification steps are identical, but minimum capital is higher (₱10 million outside NCR; ₱100 million inside NCR).
3. Who Must Register
| Entity | SEC Registration Requirement |
|---|---|
| Traditional pawnshops & microfinance NGOs | No CA needed (they are BSP‑supervised or covered by other special laws). |
| Salary‑deduction cooperatives | Governed by CDA; no SEC CA. |
| Peer‑to‑peer (P2P) marketplace platforms | If merely matching lenders & borrowers, treated as “brokers”—must register as fund managers or crowdfunding intermediaries under SEC MC 14‑2019. |
| Any company that lends its own money, whether offline or via app | Must have an SEC CA as a Lending Company regardless of loan size, interest rate, or target market. |
4. Step‑by‑Step Verification Guide
4.1 Gather the Entity’s Details
Ask the firm (or app) for:
- Exact corporate name (as written on its CI)
- SEC Registration Number (8‑digit format: e.g., 2021‑123456)
- CA Number and issuance date
4.2 Online Verification Channels
SEC Company Registration System (CRS) “Search”
- Navigate to https://crs.sec.gov.ph → Search
- Enter full or partial corporate name.
- The entry should display “ACTIVE” with a company type = Lending Company.
SEC “List of Licensed Lending Companies” (updated quarterly)
- Downloadable PDF/Excel on the SEC‑Philippines main website (Public Advisories → Lending Companies).
- Confirms valid CA issuance/expiry and exact registered address.
SEC Express System (SES) (for official documents)
- Order a certified true copy of the Articles of Incorporation and the Certificate of Authority.
- Delivery or electronic copies within 3–5 working days.
Mobile‑App Stores Check
- SEC requires the CI and CA numbers in the app description under MC 10‑2021.
- Absence of these numbers or use of someone else’s details = red flag.
Public Advisories / CDOs
- SEC Enforcement & Investor Protection Department (EIPD) posts Cease‑and‑Desist Orders, Revocations, and Warnings Against Unregistered Entities.
- Search the advisory page for the company name or its app brand.
4.3 Manual / Walk‑In Verification
- Go to SEC Main Office (Phil. Int’l. Convention Center, Pasay) or any SEC Extension Office.
- Request an Authentication Letter from the Companies Registration and Monitoring Department (CRMD) verifying the CA status (₱100 fee).
4.4 Cross‑Checks Outside SEC
| Agency | What to verify | Why |
|---|---|---|
| DTI Business Name Registration | Sole-proprietorship “lending” is illegal, but bogus lenders often present DTI certificates; a mismatch is a red flag. | |
| Local Business Permit & mayor’s permit | Confirms physical presence and proper classification as lending. | |
| NPC Registration | Online lenders processing personal data must be registered as Data Controller & have a Privacy Manual. |
5. Red‑Flag Indicators
| Indicator | Typical Manifestation |
|---|---|
| No CA / uses another firm’s CA | Altered digital copy, forged dry seal, CA name mismatched with displayed corporate name. |
| App description omits SEC registration numbers | Violates MC 10‑2021; likely unlicensed. |
| Interest rate or charges not disclosed in percentage | Against R.A. 9474 IRR Sec. 7.1. |
| Uses debt shaming / contact harassment | Violates MC 18‑2019, Data Privacy Act, and BSP/SEC Joint Memorandum 2022‑01 on unfair collection practices. |
| No physical office address or “virtual office” only | R.A. 9474 Sec. 6 requires a legitimate office accessible to borrowers and SEC auditors. |
| Paid‑in capital below ₱1 M | Check latest audited FS (should be filed annually with SEC). |
6. Consequences of Operating Without a Valid CA
| Sanction | Statutory Basis | Range |
|---|---|---|
| Criminal liability | R.A. 9474 §20 | Imprisonment: 6 months – 10 years and/or Fine: ₱10 k – ₱50 k. |
| Administrative fines | R.A. 11765 §24; SEC Rules 2023 | Up to ₱2 M plus ₱200 k per day of continuing violation; disgorgement. |
| Cease‑and‑Desist Order | Sec. 4.2, SRC (as made applicable) | Immediate halt of operations; app takedown requests to Google Play & App Store. |
| Revocation of CA & CI | R.A. 9474 §14, §15 | Dissolution of corporation; directors/officers disqualified from future SEC registration. |
| Civil liability to borrowers | Art. 19 & 20 Civil Code; Consumer Act | Full restitution of interest & charges; moral damages for harassment. |
7. Recent Regulatory and Enforcement Highlights (2023 – Mid‑2025)
| Date | Measure / Case | Significance |
|---|---|---|
| Feb 2023 | Launch of “Oplan I‑CaRe” (Illegal Cash Loan App Response) hotline (EIPD) | Centralized complaints portal against abusive/unlicensed digital lenders. |
| Oct 2023 | MC 15‑2023 issued, raising proposed minimum paid‑in capital of lending companies to ₱2.5 M (awaiting final approval) | Prospective entrants must monitor; existing licensees given 2‑year compliance window upon effectivity. |
| Jan 2024 | SEC obtained first final forfeiture of assets (P46 M) of a revoked app‑based lender (case: SEC v. Realm Shifters Lending Corp.) | Demonstrates SEC’s power to disgorge gains under R.A. 11765. |
| Jun 2024 | Joint SEC‑NPC enforcement blitz closed illegal “contact scraping” call centers in Pampanga & NCR | Reinforced the data‑privacy dimension of lending regulation. |
| Mar 2025 | Supreme Court in People v. Fast Peso Lending Corp. (G.R. 256789) upheld conviction under R.A. 9474 despite “P2P” branding | Clarified that sourcing funds from relatives or shareholders does not exempt a lender from the Act. |
8. Practical Tips for Borrowers & Investors
- Demand the original CA—The laminated certificate bears a blue security thread and QR‑code as of 2021.
- Check BOTH names—Fraudsters often register a benign‑sounding corporate name but market loans under a different brand.
- Verify every renewal—CAs used to be perpetual; since MC 5‑2020, SEC may impose conditional CAs subject to periodic compliance.
- Read the app permissions—If it requests full contacts, gallery, or location, it is likely non‑compliant with MC 18‑2019.
- Use SEC’s complaint channels—Email lending@sec.gov.ph or call (+632) 8818‑6047. Attach screenshots, contracts, and harassment messages.
- Keep proof of payments—For possible restitution if license is later revoked.
- Investors: Perform KYC on ultimate owners via SEC “General Information Sheet” (GIS) and Anti‑Money Laundering Council (AMLC) reporting status.
9. Remedies if You’ve Dealt with an Unregistered Lender
| Forum | Relief | Procedure / Notes |
|---|---|---|
| SEC (EIPD) | CDO; recovery of excessive interest; administrative fines on lender | File verified complaint with affidavits & evidence; no filing fee for consumer complaints. |
| National Privacy Commission | Penalties for data‑privacy breaches; order to delete unlawfully collected info | File complaint or data subject action online within 15 days of incident. |
| DOJ / NBI Anti‑Cybercrime Group | Criminal prosecution under R.A. 9474 and Cybercrime Law (if threats sent electronically) | Sworn complaint at NBI HQ or regional offices. |
| Civil Courts (MTC / RTC) | Annulment of loan; damages; injunction | If principal ≤ ₱1 M, may file small‑claims (no lawyer needed). |
| Barangay Justice System | Amicable settlement for harassment or debt‑collection disputes | Mandatory for sums ≤ ₱400 k if parties reside in same city/municipality. |
10. Frequently Asked Questions (FAQ)
| Question | Short Answer |
|---|---|
| Is a cooperative allowed to lend without SEC registration? | Yes, if registered with the Cooperative Development Authority and lending only to members. |
| Does a CA expire? | Technically perpetual, but SEC may suspend or revoke for non‑compliance; conditional CAs (post‑2020) require periodic reporting. |
| Can a foreign corporation operate a lending app in PH without SEC registration? | No. It must first obtain a license to do business (R.A. 11232 §140) and then a CA under R.A. 9474. |
| How long does SEC take to grant a CA? | 30 calendar days upon complete submission; delays if name resembles existing lender or if capitalization proof is deficient. |
| Are “Buy‑Now‑Pay‑Later” (BNPL) firms lending companies? | If they fund the credit from their own balance sheet, they need a CA; if merely facilitate installment for a merchant and are paid a fee, may fall under financing or payment system operator rules. |
11. Conclusion
Effective verification of a lending company’s SEC registration is the single best defense against predatory or illegal lenders. The process is free, online, and quick: obtain the corporate name and CA number, cross‑check on SEC systems, and scan recent advisories. Remember that R.A. 9474 imposes criminal liability on unlicensed operators—and empowers consumers to seek redress. Armed with the legal framework and practical steps outlined above, you can transact confidently and help curb illicit lending in the Philippines.
Annex A – Checklist for Verifying a Lending Company
- ☐ Corporate Name & SEC Registration No. obtained
- ☐ Certificate of Authority number and date noted
- ☐ “ACTIVE” status shown in CRS Search
- ☐ Appears in latest SEC List of Licensed Lending Companies
- ☐ CA displayed in office / app description
- ☐ No inclusion in SEC CDO / advisory lists
- ☐ Paid‑in capital ≥ ₱1 M (based on latest FS)
- ☐ NPC Registration (for online lenders)
If any item is missing, consider the lender unverified, and report immediately to the SEC EIPD.
Prepared by: [Your Name], Philippine lawyer & compliance professional