SEC to 200 lending firms: Secure license or be penalized

AROUND 200 companies engaged in lending activities in Central and Eastern Visayas are advised to secure a license to operate from the Securities and Exchange Commission (SEC) on or before April 30, 2017 or they will be sanctioned.

Lawyer Lindeza Gavino, SEC Cebu extension office director, said it is illegal for any person, partnership, or entity to engage in the lending business without a certificate of authority from her office.

“We have already written letters to those who are not registered with the office yet,” Gavino said during a news forum on Tuesday.

Where they are

Around 140 of these companies are in Cebu, more than 40 are in Bohol, while the rest are based in other parts of Regions 7 and 8.

Many of those who have been sent letters already assured the SEC of their compliance, but only three have actually complied so far.

Under Section 12 of RA 9474, violators may be fined P10,000 to P50,000 or face imprisonment of six months to 10 years or both, at the discretion of the court.

Gavino said that if these companies fail to meet the deadline, the SEC will have to impose penalties.

Prior to the enactment of Republic Act 9747 or the Lending Company Regulation Act of 2007, individuals and partnerships were allowed to operate a lending business even without these requirements.

At present, however, under the law, lending companies are required to convert themselves into corporations as well as to secure authority from the commission.

Gavino said reaching out to unregistered lending companies have long been part of the agency’s drive, but has been magnified ever since President Rodrigo Duterte announced that he will put an end to the “five-six lending scheme.”

“Five-six,” Gavino explained, was a term used to describe illegal or informal lending, infamous for offering interest rates of 20 percent or more.
“It’s called such because when you borrow five, you have to pay back six,” shesaid.

Evelyn Garso, officer-in-charge for registration of lending and financing companies at SEC, said they had already issued certificates of authority to 434 corporations in Regions 7 and 8 as of March 27 this year.