Pres. Duterte's Promise of Ending 5-6 Lending in the Country is Gaining Grounds

The promise of President Rody Duterte to end the misery of the poor particularly the proliferation of 5-6 lending is now gaining grounds after the Securities and Exchange Commission (SEC) cracks down on informal lenders.

During the election period Pres. Duterte promised to eradicate not only the drugs problems but also the informal money lending sectors in the country, those lenders who usually charge exorbitant interest rates to victimize borrowers through fraud, falsification and harassment.

According to SEC Chairman Teresita Herbosa all "informal money lenders" are warned that a fine or imprisonment or both await persons who engage in lending without primary registration of of incorporation and secondary license to extend loans to the public.

The SEC clarified that under Section 12 of the Lending Company Regulation Act of 2007, or Republic Act 9474, those who fail or refuse to incorporate and obtain a license from the SEC to engage in lending face a fine of P 10,000 to P50,000, or imprisonment of six months to 10 years, or both.

Herbosa said SEC record found that there were 3,000 lending companies which have not gone through the full registration, thus issued with show cause letters with the warning that their primary registration with the SEC will be revoked if they fail to obtain a CA and may be held liable for fines and penalties.

The measures made by SEC was due to the order of Pres. Rody Duterte who was concerned about the proliferation of the so-called "5-6" lending system by certain nationals particularly the Indian nationals, and underscored the need to take drastic measures to address this problem.

Source: The Daily Tribune

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