THE Securities and Exchange Commission (SEC) has warned firms and individuals against engaging in lending business without the required authorization from SEC.
SEC-Zamboanga Extension Office Chief Jesus Salvador Uro issued the warning as they are strictly implementing Republic Act (RA) 9474, otherwise known as the Lending Company Regulation Act of 2007.
Uro’s warning is in line with the public declaration of President Rodrigo Duterte against people, including Indians, engaged in lending business through the five-six scheme.
The five-six scheme is a kind of usury, as the borrower of the money is required to pay a 20-percent interest rate.
Uro said that under the law, only registered corporations with a paid-up capitalization of at least P1 million can be granted to an authority to operate as a lending company.
Uro said that entities that engage in lending without the required authorization from SEC can be criminally prosecuted and punished with a fine of not less than P10,000 and not more than P50,000, or imprisonment of not less than six months and not more than 10 years or both, at the discretion of the court.
Uro added that the SEC can administratively penalize any entity in violation of RA 9474 with a fine of P50,000.
He encouraged the public to report to his office any person or firm engaging in the business activities of a lending company without the required Certificate of Authority from SEC.
He said they can be reached through telephone numbers (062)991-71-63, (062)993-14-37 or through email at email@example.com. (Bong Garcia/SunStar Philippines)