Fintech group pushes higher capital base for lending firms

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March 17, 2026 | 12:00am

MANILA, Philippines — A fintech industry group is urging regulators to raise the minimum capitalization for lending companies, saying stronger capital requirements would ensure only serious players operate in the fast-growing digital lending market.

Lito Villanueva, founding chairman of Fintech Alliance.PH, said the current capitalization rules for lending companies are too low and could expose consumers to risks if firms lack sufficient financial capacity to sustain their operations.

“We are pushing that actually. Us at the Fintech Alliance, we are pushing (for higher capitalization requirements) because we need serious players,” Villanueva said in an ambush interview.

Villanueva noted that unlike digital banks, which must have at least P1 billion in capital to secure a license from the Bangko Sentral ng Pilipinas, lending companies currently face minimal capitalization requirements.

“How would you even expand your lending when your capital is too low?” he asked.

The fintech executive said regulators have floated the possibility of setting a P10 million minimum capitalization for lending companies, but he believes that level may still be insufficient.

Instead of a flat requirement, Villanueva said regulators could consider a tiered capitalization framework that would align the size of a lending company’s capital with the scope of its operations.

Under such a model, firms with smaller capital bases will be allowed to operate within a limited geographic area, similar to how the banking industry distinguishes between universal banks, commercial banks, thrift banks and rural banks.

“Depending on the size of your capital, the coverage would also have to be in conformity,” he said. “If you are a lending company with this tiered capital requirement, then even the coverage would also have to be in conformity.”

He said this approach would prevent smaller firms from overextending their lending activities while still allowing them to operate within their financial capacity.

Villanueva emphasized that higher capitalization would not necessarily stifle the growth of online lending platforms, arguing that sufficient capital is essential for firms that intend to expand responsibly.

“No, because they need the capital to begin with if they are really serious about it,” he said. “And we need more serious players in the industry.”

He added that stronger capitalization rules would also complement broader regulatory efforts to strengthen consumer protection in the digital finance sector, particularly as authorities tighten oversight of online lending firms and their collection practices.

The Securities and Exchange Commission is currently proposing to lift the moratorium on the registration of new online lending platforms, which has been in place since November 2021.

The move aims to reopen the market to new digital lenders while imposing stricter rules to ensure responsible lending and stronger consumer protection.

Under the draft guidelines, the SEC is also proposing higher paid-up capital requirements for financing and lending companies depending on the number of online lending platforms they operate.

Financing companies without online platforms will need at least P20 million in capital, while lending companies will need P10 million.

Firms operating digital lending platforms would face higher thresholds, with capital requirements rising to as much as P100 million depending on the number of platforms they run.