Google’s new selection process for lending apps

As noted in my column last week, Google Philippines has introduced stricter requirements for lending apps on Google Play following discussions with the Securities and Exchange Commission (SEC) regarding the proliferation of unregistered online lending apps. . Starting May 11, Google will require developers of personal loan apps targeting users in the Philippines to submit a personal loan app statement and submit necessary documentation before they can publish apps to the Google Play Store. The Philippines is just one of three countries where Google will implement the additional requirements, the other two being India and Indonesia.

Developers must disclose in the disclosure form that they are registered and duly authorized by the SEC to operate an online lending platform (OLP), engage in lending-based crowdfunding activities such as peer-to-peer lending, or act as a crowdfunding intermediary. The developers have also confirmed that they are carrying on a lawful business activity and undertaking the same in accordance with applicable laws. Personal loan apps operating in the Philippines without the proper statement and license will be removed from the Play Store. In the event that the license, registration or statement submitted is no longer valid under applicable laws, developers are required to promptly remove the application from the Play Store.

Republic Act 9474 or the “Credit Companies Regulation Act of 2007” requires persons or entities operating as loan companies to register as companies and obtain the necessary license to operate in from the SEC. Meanwhile, Republic Act 8556 or the “Finance Companies Act of 1998” also requires finance companies to register with the SEC as corporations and separately obtain a license to operate. In addition, SEC Memorandum Circular 19, Series of 2019 requires finance and loan companies to register their PLOs as trade names and disclose their corporate names, SEC registration numbers, and certificate numbers. of authority in their PLOs and advertisements.

With upcoming guidelines on registration and licensing of PLOs, the SEC has meanwhile imposed a moratorium on new PLOs. According to SEC Memorandum Circular 10, Series of 2021, only those registered as of November 2, 2021 can operate and be used for online lending or financing. The SEC regularly monitors the compliance of loan and finance companies with applicable laws, rules and regulations in an effort to protect borrowers from abusive, unethical and illegal lenders.

To date, the commission has revoked the certificates of registration of more than 2,000 loan and finance companies that have not obtained the certificate of authorization required to operate a finance/loan (CA) company and has voided the CAs of 37 others due to various violations of applicable rules and regulations. In addition, 72 PLOs have been ordered out of business because they are not allowed to operate as loan or finance companies.

To view the list of approved loan and finance companies and their registration status, please visit the Loan and Finance Company Corner on the SEC website at https://www.sec.gov.ph/ lending-companies-and-financing-companies- 2/sociétés-de-loan-et-sociétés-de-finance/.

Once again, I would like to thank Google Philippines for their cooperation in the SEC’s ongoing crackdown on unregistered/illegal online lending applications. We look forward to more meaningful partnerships with you.

Kelvin Lester K. Lee is Commissioner of the Securities and Exchange Commission. The views and opinions expressed herein are his own. You can send your comments and questions to [email protected]


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