The Trade Department is giving underground lenders or those lending under the ‘5-6’ system six months to register their businesses and be a part of the official lending sector under Pondo Para sa Pagbabago at Pag-asenso program.
“What we want to happen is to prevent any incident of undue harassment to befall foreign illegal lenders or loan sharks. There are reports of instances where they are arrested for questioning. We want them to officially register their business,” said Trade Secretary Ramon Lopez.
He said the government was willing to give loan sharks ample time to legitimize their business with the Securities and Exchange Commission.
“First, these lenders will have their legal identity instead of being illegal alien. Then, they’ll have a legitimate business and they can start paying the proper taxes,” he said.
The ‘5-6’ lending system is dominated by Indian nationals, but there are also other nationalities involved in illegal lending. The government is hoping that with the P3 program, illegal lending will be discontinued.
P3 program provides micro, small and medium enterprises with easy access to finance with no collateral and minimal interest, through micro-finance institutions and cooperatives accredited by the Trade Department and the Small Business Corp.
The Trade Department recently called for an inter-agency meeting with the Justice and Foreign Affairs Departments, the Immigration Bureau, National Intelligence Coordinating Agency, Bangko Sentral ng Pilipinas, Philippine National Police, SB Corp. and the Indian Chamber of Commerce to form a technical working group for the program.
The technical working group was tasked to come up in two weeks with specific guidelines for the compliance and registration of the lenders.
