Lending Company Requirements in the Philippines: SEC Rules, Capital and Interest Caps (2026)
Updated: 2 days ago
Short answer: A lending company in the Philippines must be a corporation and must hold a Certificate of Authority (CA) from the Securities and Exchange Commission (SEC) before it grants any loan. The SEC is the main regulator; the Bangko Sentral ng Pilipinas (BSP) plays only a narrow role. A new lending company now needs at least ₱5 million in paid-up capital, and more if it runs online lending apps. Small, short-term unsecured loans of up to ₱10,000 are capped at 6% nominal and 12% effective interest a month. Anti-money laundering, data privacy and SEC reporting rules also apply.
What counts as a lending company
A lending company is a corporation that grants loans from its own capital or from funds sourced from not more than 19 persons (Section 3, Republic Act No. 9474). Banks, investment houses, financing companies, pawnshops, cooperatives and other credit institutions regulated by other laws are excluded. Financing companies follow a separate law; see SEC and BSP compliance for financing companies. Funding your loans by borrowing from more than 19 lenders can amount to quasi-banking, which needs BSP authority.
Who regulates what
The SEC licenses, supervises and sanctions lending companies (Sections 4, 9 and 11, Republic Act No. 9474). The BSP's role is limited:
it supervises lending companies that are subsidiaries or affiliates of banks or quasi-banks;
the Monetary Board may examine a lending company used as a conduit to get around BSP rules (Section 11, Republic Act No. 9474); and
the Monetary Board may set interest ceilings, in consultation with the SEC and the industry (Section 7, Republic Act No. 9474), as it did in BSP Circular No. 1133, s. 2021.
The small-loan cap in force today, however, is the SEC's own.
Licensing: incorporation is only step one
No lending company may do business without a CA from the SEC (Section 4, Republic Act No. 9474). A certificate of incorporation alone does not let you lend. Lending without a valid CA, or holding out as a lending company without one, is a crime punishable by a fine of ₱10,000 to ₱50,000, six months to ten years in prison, or both (Section 12, Republic Act No. 9474).
Under SEC Memorandum Circular No. 20, s. 2026 (MC 20), one CA covers all of a company's lending activities, including its branches and online lending platforms (OLPs). A new company must also file a business plan within 60 days after receiving its CA (SEC Memorandum Circular No. 3, s. 2022).
Minimum capital in 2026
The law sets a ₱1 million floor and lets the SEC require more (Section 5, Republic Act No. 9474). MC 20 now requires:
at least ₱5 million paid-up capital for a new lending company without an OLP; and
₱10 million for the first OLP, plus ₱10 million for each additional OLP, up to five OLPs (₱50 million).
Existing companies running OLPs have 12 months from MC 20's effectivity to meet these levels. Those that will not capitalize every OLP must, within 180 days, cut back to the number their capital supports.
Foreign ownership
Foreigners may own up to 100% of a lending company (Section 6, Republic Act No. 9474, as amended by Republic Act No. 10881). The older majority-Filipino rule no longer applies.
The limit is land. A lending company more than 40% foreign-owned may bid at a foreclosure sale of mortgaged land and take possession, but it cannot take title. It must transfer its rights to qualified Philippine nationals within five years from actual possession. The 13th Regular Foreign Investment Negative List keeps private land ownership at 40% foreign equity (Executive Order No. 113, s. 2026). See The 40% foreign ownership rule.
Interest and fee caps on small loans
These caps apply to unsecured, general-purpose loans of up to ₱10,000 with terms of up to four months, entered into, restructured or renewed from April 1, 2026 (SEC Memorandum Circular No. 14, s. 2025):
Nominal interest: up to 6% a month (about 0.2% a day).
Effective interest rate: up to 12% a month (about 0.4% a day), covering interest, fees and charges but not late-payment penalties.
Late-payment penalties: up to 5% a month on the outstanding amount due.
Total cost: interest, fees, charges and penalties combined may not exceed 100% of the amount borrowed.
The BSP's 2021 ceiling allowed a 15% monthly effective rate (BSP Circular No. 1133, s. 2021). The SEC cut it to 12% under its power to judge whether interest and fees are reasonable (Section 6(a), Republic Act No. 11765). Splitting loans or relabeling fees to dodge the cap is a violation, punishable by fines starting at ₱50,000 and, for a third offense, revocation of the CA and the certificate of incorporation.
Larger or longer loans have no fixed cap, but rates and charges must be reasonable and disclosed (Section 7, Republic Act No. 9474).
Online lending platforms
The SEC stopped registering new OLPs on November 5, 2021 (SEC Memorandum Circular No. 10, s. 2021). MC 20 lifted the freeze effective August 1, 2026, but approval is not automatic. Key rules:
An OLP is any borrower-facing app, website or system with its own name or brand; each brand counts separately.
A company may run at most five OLPs, each disclosed to the SEC and registered as its business or trade name.
Borrowers must see the key terms, including the amount, rates, fees and payment schedule, and expressly accept them before the loan is confirmed. Automatic release and automatic renewal are banned.
Contacts and references are not guarantors unless they separately agree in writing.
OLP operators must register with the Credit Information Corporation and submit credit data (Republic Act No. 9510).
Ads and OLPs must show the company's corporate name, SEC registration number and CA number (SEC Memorandum Circular No. 19, s. 2019).
Disclosure, collection and data privacy
Before a loan is closed, the borrower must get a written statement of the amount financed and the finance charge, in pesos and as a simple annual rate (Section 4, Republic Act No. 3765). The consumer protection law adds duties on fair treatment, disclosure and complaints handling (Section 8, Republic Act No. 11765; SEC Memorandum Circular No. 5, s. 2023).
Unfair collection is banned, including threats, insults, publicizing a borrower's debt, calls at unreasonable hours and contacting people in the borrower's contact list other than guarantors or co-makers (SEC Memorandum Circular No. 18, s. 2019). Using a third-party collector does not shield the lender.
Online lenders may not freely harvest phone or social media contacts, and may never use a borrower's photo to harass (NPC Circular No. 20-01, as amended by NPC Circular No. 2022-02).
Anti-money laundering
Lending companies are covered by the SEC's anti-money laundering guidelines (SEC Memorandum Circular No. 16, s. 2018, as amended by SEC Memorandum Circular No. 4, s. 2021). Each must register with the Anti-Money Laundering Council (AMLC), adopt a board-approved, risk-based prevention program, and meet the customer due diligence, record-keeping and reporting duties under the Anti-Money Laundering Act.
Reports to the SEC
The SEC's reportorial list for lending companies includes:
General Information Sheet (GIS), within 30 calendar days after the annual stockholders' meeting
Audited financial statements (AFS), within 120 days after fiscal year-end or by the date in the SEC's yearly filing schedule
Special Form of Financial Statements, within 30 days after the AFS due date
Semi-annual financial statements for the periods ending June 30 and December 31
Other filings, such as the AMLA compliance form, a sworn certification on collection practices and OLP disclosure forms
Frequently asked questions
Is SEC registration enough to start lending?
No. You also need a Certificate of Authority from the SEC.
What is the minimum capital for a lending company?
₱5 million for a new lending company, or ₱10 million per OLP, up to ₱50 million for five.
Does the BSP regulate lending companies?
Only in limited cases, such as lending companies tied to banks or quasi-banks. The SEC licenses and supervises the rest.
Can we launch a new lending app now?
Yes, since August 1, 2026, subject to SEC approval, the MC 20 capital levels and the five-OLP limit.
Sources
Republic Act No. 9474 (Lending Company Regulation Act of 2007), as amended by Republic Act No. 10881
Republic Act No. 3765 (Truth in Lending Act); Republic Act No. 9510 (Credit Information System Act); Republic Act No. 11765 (Financial Products and Services Consumer Protection Act)
BSP Circular No. 1133, s. 2021
SEC Memorandum Circular Nos. 18 and 19, s. 2019; No. 10, s. 2021; No. 3, s. 2022; No. 5, s. 2023; No. 14, s. 2025 (December 10, 2025); and No. 20, s. 2026 (July 2026)
SEC Memorandum Circular No. 16, s. 2018, as amended by SEC Memorandum Circular No. 4, s. 2021
NPC Circular No. 20-01, as amended by NPC Circular No. 2022-02
Executive Order No. 113, s. 2026 (13th Regular Foreign Investment Negative List)
SEC reportorial requirements for lending companies
Need help with SEC or corporate compliance?
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This article is general information as of its publication date, not legal advice, and does not create a lawyer-client relationship. For advice on your situation, consult a lawyer.
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