SEC: Google tightens rules on local lending apps offered in PlayStore

Google would require developers offering personal loan services to submit a declaration and necessary documentation before they could publish apps.

File photo: Google Play Store

The goal is to combat illegal and abusive lending from loan sharks

After the SEC's recommendations, the search giant 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,

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.

This means additional layers of paperwork for online lenders if they wish to stay on Google Play. Google aims to curb the activities of loan sharks.

Aside from that, developers must also prove that they have the right 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 lawful business activity and are undertaking the same in compliance with the applicable laws.

If they fail to comply with the said requirements, Google will eventually remove the app from the Play Store. Expired developer's license and registration would also lead to app removal.

Failure to submit the requirements would lead to their app’s removal from Google Play. Should the developer’s license and registration expire, Google would remove the app from the store.

The SEC has been working with Google for almost three years now to address the increase of unregistered personal loan apps. Allegedly, there are even some companies that use harassment and threats to collect in case of defaults.

Moreover, there are companies that implement ridiculously high-interest rates, going as high as over 500 percent. These instances pushed the Bangko Sentral ng Pilipinas to set a cap.

As of writing, the SEC has annulled the registration of over 2,000 lending and financing companies because they lacked documents. The commission added that the Philippines is the third country where Google will implement the additional requirements for developers of personal loan apps. The other two are India and Indonesia.

SEC Chairperson Emilio Aquino expressed his gratitude to the search giant for its support. The agency noted that they aim to preserve the financing and lending industry’s integrity, and provide Filipinos with secure and accessible financing options.

The new approval process will be effective on May 11, 2022.

You can click here to see the list of licensed lending and financing companies and their registration status.

Sources: Rappler, Business Mirror