The Securities and Exchange Commission (SEC) will lift its three-year moratorium on new online lending platforms starting April 1, signaling a major policy shift aimed at expanding competition while tightening oversight of the fast-growing digital lending sector.
The ban, imposed on November 2, 2021, stopped the registration of new online lending apps amid widespread complaints of abusive collection practices. Only firms registered as of that date were allowed to operate.
SEC Commissioner Rogelio V. Quevedo said the reopening reflects stronger regulatory controls now in place. The agency has intensified enforcement and revoked the registrations of numerous erring lending companies, most of them operating online.
Alongside reopening the market, the SEC is moving to cut borrowing costs. Online lending rates are currently capped at 15 percent per month, but regulators want this reduced to 12 percent beginning April.
Officials argue that high rates are partly driven by weak credit information sharing, which forces lenders to charge steep risk premiums to cover uncertainty about borrowers’ credit histories.
The SEC chairs the state-run Credit Information Corp., while the private sector operates CIBI Information Inc.. Regulators are studying ways to strengthen these institutions and integrate credit data nationwide to better distinguish reliable borrowers from high-risk ones.
Quevedo said the current system leaves “good borrowers” effectively subsidizing bad ones because lenders lack complete and reliable information.
Industry players welcomed the move but stressed that regulatory reform must go beyond lifting the moratorium.
Raffy Montemayor of the Salmon lending app, operated by Sunprime Finance Inc., said creditworthiness should no longer be judged solely on past loans. Alternative financial data — from utility payments to digital transaction patterns — can help lenders make more accurate risk assessments.
However, he said the absence of a standardized, secure framework for mandatory data sharing keeps valuable information locked within institutions, limiting responsible access to credit.
Pavel Fedorov, also of Salmon, underscored the need for secure and standardized application programming interface (API) systems under an Open Finance framework, allowing customers to authorize the sharing of machine-readable financial data with providers of their choice.
He cited Cambodia as a model, where regulator-enforced data-sharing frameworks have expanded access to credit and helped drive lending rates down to as low as 6 percent.
The lifting of the moratorium marks a decisive shift from restricting entry to reshaping the rules of the digital lending market. By combining tighter supervision, lower rate caps and stronger credit data integration, the SEC aims to widen access to credit, foster competition and bring down borrowing costs — while maintaining consumer protection safeguard
