BSP vows to deal with abusive online lenders

MANILA  -Extending cheap credit is crucial in furthering financial inclusion in the country but abusive online lending practices are scaring Filipinos from accessing alternative borrowing options, according to the Bangko Sentral ng Pilipinas (BSP).

BSP Governor Eli Remolona Jr. said online lending application (OLA) operators harassing borrowers into paying loans were “hampering” the progress of financial inclusion.

OLAs are easily accessible because they usually have less stringent underwriting process compared to traditional banks. Some OLA operators, however, shame borrowers by calling family members and friends reminding them of the loan payment’s due date.

READ: SEC, NPC step up fight vs abusive online loan collection practices

At the 2023 Alliance for Financial Inclusion (AFI) Global Policy Forum on Thursday, Remolona said addressing the matter of abusive OLAs was “one of our priorities in the coming months.”

He stressed the importance of having an accessible and cheap credit facility so Filipinos could avoid informal, albeit predatory lending channels.

Remolona added the BSP was crafting a framework that would eliminate transaction fees for small-value bank transfers to boost digital payment adoption. He said they were in talks with the Bankers Association of the Philippines, e-wallet service providers and other stakeholders.

READ: Scrapping of fees on ‘small’ online fund transfers eyed

During the event, the “Manila Manifesto” was also approved by the 86 member-institutions of AFI, a global organization focusing on financial inclusion policy and regulation. The manifesto seeks to improve global policy standards by engaging developing countries in relevant discussions.