Technology giant Google is tightening its approval process for online lending applications in the Philippines, taking part in the government’s efforts to combat illegal and abusive lending practices, the Securities and Exchange Commission (SEC) said Tuesday.
In a statement, the SEC said that effective May 11, 2022, Google would require app developers offering personal loan services in the country to submit a Personal Loan App Declaration, and submit necessary documentation before they could publish apps on Google Play Store.
In the declaration form, the corporate regulator said developers shall state that they are registered with and duly licensed by SEC Philippines to operate an online lending platform (OLP), perform lending-based crowdfunding activities, such as peer-to-peer lending, or act as a crowdfunding intermediary.
Also, developers shall confirm that they are engaged in a lawful business activity and are undertaking the same in compliance with the applicable laws, it added.
The SEC noted that personal loan apps operating in the Philippines without proper declaration and license attribution will be removed from the Google Play Store.
If the submitted license, registration, or declaration is no longer valid under the applicable laws, the developers are required to promptly remove the app from Google Play Store, the corporate regulator added.
Republic Act No. 9474, or the Lending Company Regulation Act of 2007, requires persons or entities operating as lending companies to register as corporations and to secure from the SEC the necessary authority to operate.
Meanwhile, Republic Act No. 8556, or the Financing Company Act of 1998, also requires financing companies to register with the SEC as corporations and to secure separately from the Commission an authority to operate as such.
Moreover, under SEC Memorandum Circular No. 19, Series of 2019, the corporate regulator further requires financing and lending companies to register their OLPs as business names, as well as disclose their corporate names, SEC registration numbers, and certificates 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.
Under SEC Memorandum Circular No. 10, series of 2021, only those registered as of November 2, 2021 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,” said SEC Chairperson Emilio Aquino.
“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,” he added.
The SEC said it has been in correspondence with Google since May 2019 to address the proliferation of unregistered personal loan apps.
Aside from reporting and requesting the removal of unlicensed lending apps from the Google Play Store, the regulator said it has enjoined the US-based technology giant to verify the legitimacy of lending and financing companies looking to develop and publish their apps.
The Philippines is only the third country where Google will implement the additional requirements for developers of personal loan apps to curb the proliferation of illegal and abusive lending activities online, the other two being India and Indonesia. — DVM, GMA News
Google tightens approval process for lending apps in Philippines -SEC
Source: News Panda Philippines
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