The Securities and Exchange Commission (SEC) has penalized Jia Financing Inc. for launching an online lending platform (OLP) despite a moratorium on such operations and for failing to disclose key details in its submitted business plan.

In an order issued by the SEC’s Financing and Lending Companies Division, Jia Financing was found to have violated Memorandum Circular (MC) No. 10, series of 2021, which prohibits the registration and launch of new online lending platforms.

Jia Financing, registered with the SEC in March 2023, came under scrutiny after presenting at a Bangko Sentral ng Pilipinas (BSP) event in April 2025. During the event, it was revealed that the company operates a website offering financing services such as invoice and inventory factoring, supply chain financing, and platform financing, with loans ranging from $50,000 to $200,000 per client.

The SEC subsequently issued a Show Cause Letter on 16 May, asking the company to explain its operations in light of the existing ban. In its response, Jia argued that its website does not facilitate public lending applications, nor does it offer consumer loans or mobile app services. It said the website functions as a closed-loop system for registered SMEs that have undergone offline verification and onboarding.

Despite these explanations, the SEC ruled that the company’s website constitutes an online lending platform under MC 10. The Commission emphasized that the moratorium covers all forms of fintech-enabled lending systems, whether or not they are publicly accessible.

"There are no exemptions under the memorandum circular," the order stated, adding that launching any form of online platform without prior approval is a direct violation.

For this infraction, Jia Financing was ordered to pay an administrative fine of P10,000 and to take down its website.

Business plan discrepancies

Jia Financing also ran afoul of MC No. 3, series of 2022, which requires lending and financing companies to submit business plans disclosing all loan products and applicable pricing parameters, in line with interest rate ceilings set by the Bangko Sentral ng Pilipinas.

The SEC noted that Jia’s business plan, submitted in May 2023, did not mention the operation of a lending website or the specific loan range of $50,000 to $200,000 it reportedly offers to clients.

Under the rules, failure to disclose such critical information – or implementing an amended business plan without prior Commission approval – may lead to the suspension or revocation of the company’s Certificate of Authority to operate.

The Commission reiterated that non-compliance with the required disclosures in the business plan is a serious offense, punishable by fines, license revocation, and even the disqualification of company officers.

This latest enforcement action forms part of the SEC’s broader push to tighten oversight of lending and financing companies, particularly in the digital space, to protect borrowers and uphold fair lending practices.