MANILA, Philippines — The Securities and Exchange Commission drew the line on online lending platforms as it suspended new registrations in a bid to stop predatory behavior from these financing outfits.
In a statement on Friday, the regulator issued the moratorium as it observed fintech companies took advantage of financially-needy Filipinos amid the pandemic which sent in the Philippine economy into a tailspin.
“We have seen the emergence of financial technology companies that engage in predatory lending, taking advantage of those struggling financially during the pandemic. The Commission will work toward stamping out these abusive financing and lending companies that do nothing but bury borrowers in even more debt,” said SEC chairperson Emilio B. Aquino.
As it is, the SEC said online lending platforms registered prior this memo will be allowed to continue operations, as these ventures will be subject to the regulator’s strict monitoring and compliance.
There are 101 lending and financing companies registered under the SEC before the suspension.
That said, the regulator issued a memorandum circular ahead of the release of new rules governing the licensing and registration of online lending platforms from financing and lending firms.
The SEC has revoked the licenses of 35 financing and lending companies owing to a long list of violations.
Likewise, the SEC ordered the termination of 58 online lending platforms owing to a lack of authority to operate as lending or financing venture.
The regulator also canceled the certificate of registration of 2,081 lending companies as these ventures failed to secure a certificate of authority mandated by the Lending Company Regulation Act of 2007.