GOOGLE is adopting a more stringent approval process for online lending applications in the Philippines, the Securities and Exchange Commission (SEC) said in a media release on Tuesday.
“Google will require developers offering personal loans in the Philippines to submit a personal loan app declaration, and submit necessary documentation before they could publish apps on Google Play Store,” the SEC said.
The decision was recommended by the SEC to address illegal and abusive lending practices.
In the declaration form, developers will need to state that they are registered with and duly licensed by the SEC to operate an online lending platform (OLP), or to perform lending-based crowdfunding activities, such as peer-to-peer lending, or to act as a crowdfunding intermediary.
Developers will also need to confirm that they are engaged in a lawful business activity and are undertaking the same in compliance with the applicable laws.
Personal loan apps operating in the Philippines without proper declaration and license attribution will be removed from the Play Store, the commission said.
Persons or entities operating as lending companies are required to register as corporations and to secure from the SEC the necessary authority to operate.
Likewise, financing companies must register with the SEC as corporations and to secure separately from the commission an authority to operate as such.
The commission also further requires financing and lending companies to register their OLPs as business names, as well as disclose their corporate names, SEC registration numbers, and certificate of authority numbers in their OLPs and advertisements.
In November 2021, the commission imposed a moratorium on new OLPs while it drafted guidelines on the registration and licensing of OLPs.
Only those registered as of Nov. 2 may operate and be used for online lending or financing, subject to strict monitoring.
“We thank Google for supporting our efforts to combat illegal and abusive lending, and thereby preserve the financing and lending industry’s integrity, and provide Filipinos secure and accessible financing options,” SEC Chairperson Emilio B. Aquino said in a statement.
“We are positive that the additional requirements, imposed by Google for developers of personal loan apps targeting users in the Philippines, will serve as another layer of protection for Filipino borrowers and deterrence against predatory lending,” Mr. Aquino added.
Since 2019, the SEC said it had been in correspondence with Google to address the proliferation of unregistered personal loan apps.
“Aside from reporting and requesting for the removal of unlicensed lending apps from Google Play Store, the commission has enjoined the US-based technology giant to verify the legitimacy of lending and financing companies looking to develop and publish their apps,” the SEC added. — Luisa Maria Jacinta C. Jocson