MANILA, Philippines — Two years after it launched a massive crackdown on informal lenders, the Securities and Exchange Commission (SEC) has already revoked the licenses of more than 1,000 corporations.
SEC chairperson Emilio Aquino said the companies were found to have engaged in illegal lending.
The move is part of President Duterte’s campaign against these so-called loan sharks.
A 5-6 loan implies an annual simple interest rate of 20 percent because a borrower who borrows P5 needs to pay P6.
Many micro, small and medium enterprises usually resort to 5-6 lenders who are usually Indian nationals.
Duterte said the 5-6 scheme has become a burden to Filipinos especially those who have no other other sources of loans, either for their small businesses, personal emergencies or simply to sustain their day-to-day needs.
The SEC said it is illegal to act as a lending company or lending investor unless it registers as a corporation and secures a license to operate and engage in lending.
It warned that penalties await those who violate the law through failure or refusal to incorporate and obtain a license from the SEC to engage in lending.
Section 12 of the Lending Company Regulation Act of 2007 or RA 9474, states that a fine of not less than P10,000 and no more than P50,0000 or imprisonment of no less than six months but no more than ten years or both await the violators.
Aquino said the SEC has already filed charges against those found engaged in these activities.
“We have already filed criminal charges against 153 individuals including 67 foreign nationals. These are for violation of the lending company regulation act. The accused are now ongoing trial,” he said.
Estimates of the commission show that informal lending has already reached at least P3 billion.
Aquino said Filipinos may now be having difficulty in accessing credit because of the SEC crackdown but noted that there are other options available.
Government agencies such as the Department of Trade and Industry (DTI) and other government financial institutions and ordinary banks can extend loans to small businesses.