JIA FINANCING, INC.

SecuritieS and Exchange Commission BAGONGPILIPINAS FINANCING AND LENDING COMPANIES DEPARTMENT In the matter of FinLend Order No. 2025 - 36 JIA FINANCING INC 0049-36 (SEC Reg.No.2023030091229-01,C.A. No.F-23 Respondent, x FOR: MEMORANDUM ISSUANCES SUSPENSION AUTHORITY TO OPERATE ASA FINANCING FINANCING AND COMPANY ITS FOR COMPANY IRR OF VIOLATIONS OF THE AND CIRCULARS CERTIFICATE ACT OTHER (R.A. 8556 AND SEC OF ORDER Memorandum Circular No.10,series of 2021 (MC 10,series of 2021,which imposes a moratorium on new online lending platforms. This resolves the Show Cause Letter (SCL) sent against Jia Financing Inc.for its alleged violation of Certificate of Registration No.2023030091229-01 and Certificate of Authority No. F-23-0049-36. This registration grants the company the authority to engage in financing activities. Jia Financing Inc.the Respondent) was registered with the Commission on March 20,2023,under Inclusion Core Group meeting, held at the Bangko Sentral ng Pilipinas (BSP). During the presentation, it was revealed that the Respondent operates a website,jia.ph,which offers various financing services, including invoice factoring, inventory factoring, inventory financing, supply chain financing, and platform financing. The company discloses that it provides loans ranging from $50,000 to $200,000 per client. On April 24,2025,the Respondent was invited to present at the 3rd National Strategy for Financial liable for launching and operating its undisclosed website in violation of MC 10,Series of 2021. Cause Letter (SCL) against the Respondent,giving them ten (10) days to explain why it should not be held On May 16,2025,the Financing and Lending Companies Department (FinLenD) issued a Show Honorable Commission's initiatives to expand access to capital for SMEs lacking opportunities for active operations and recurring revenue that seek working capital to foster growth or manage cash flow general-purpose, consumer-based,unsecured, or mobile app lending products. Instead, the Respondent (SMEs.The Respondent is committed to supporting the national government's priorities and the traditional bank lending. The Respondent's borrowers primarily consist of registered businesses with gaps.Typically, the company lends amounts between $50,000 and$200,000 per client. focuses on invoice-based receivables financing for formally registered small and medium enterprises On May 25,2025, the Respondent complied with the SCL,stating that it does not offer personal offline and manually by dedicated teams. Regarding its core lending operations, the Respondent clarifies that these functions are performed financial services offered by the Respondent, it does not have a public interface for loan applications and its associated dashboard are not publicly accessible lending platforms. While the website outlines the approvals,or servicing. The website does not provide an independent automated or digital process for accepting,processing,or approving any loan applications. Finally,concerning the existence of its website,the company emphasizes that the site (www.jia.ph) access, limited to the Respondent's team and business borrowers who have undergone thorough oflin Instead, the website and its dashboard are secure, closed-looped internal tools with restricto 0 D Scan the QR to verify the document Exchange SecuritieS and Commission HITIPPINIS BACONGPILIPINAS Page 2 of 4 Jia Financing Inc. In the Matter of rather than serving the public at large. Know Your Business (KYB) verification and manual onboarding and approval processes. The website is primarily used for documentation and coordination purposes to support the team and existing SME clients, ISSUE: Company Act in relation to Memorandum Circular (MC) No.10,series of 2021,and MC 3,series of 2022,on its Business Plan discrepancies. Whether the Respondent can be held administratively liable for violation of the Financing HELD: We rule in the affirmative, is essentially an Online Lending The Respondent violated MC No. 10,Series of 2021,as its Website Platform. rule, which provides that in administrative proceedings, the quantum of proof necessary for a finding of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds equally reasonable might conceivably opine otherwise. The requirement is satisfied where there is evidence might not be overwhelming? guilt is only substantial evidencel. More than a mere scintilla of evidence,substantial evidence means such reasonable ground to believe that the respondent is guilty of the act or omission complained of,even if the In determining the Respondent's violation,this Department shall uphold the substantial evidence applications are permitted to be launched or commenced. websites, and other FinTech-enabled programs or systems where the products and services of financial applications. This Circular defines online lending platforms (OLPs as mobile lending applications 10, Series of 2021,which imposed a moratorium on the registration of new online lending platforms or companies (FCs and lending companies (LCs are made available.Upon its effectivity,no platforms or It is essential to note that on November 5,2021,the Commission issued Memorandum Circular No Circular No.10,as the Circular does not provide any exemptions. Therefore, the Company has violated the Commission's issuance,specifically Memorandum Circular No.10, Series of 2021. Company's justification for operating the website does not exempt it from compliance with Memorandum According to records, the Company launched its website despite the existing moratorium. The administrative penalties for erring financing companies who have violated the order of the Commission, thus: The Implementing Rules and Regulations of the Financing Company Act warrant the imposition of SECTION 14. Administrative Sanctions or ruling,or the financing company refuses to have its books of accounts audited, or continuously fails to comply with the SEC requirements, the and Regulations,ofthe terms and conditions ofthe Certificate of Authority to operate as a Financing Company, of any Commission order,decision If the Commission finds that there is aviolation of RA 8556,of these Rules Macaventa v.Nuyda,A.C.No.11087,October 12,2020 Diaz v.Ombudsman,G.R.No.203217.July 02,2018 Scan the QR to verify the document Exchange Commission Securities and IILIPFIN BACONG PILIPINAS Page 3 of 4 Jia Financing Inc. In the Matter of (emphasis supplied) Commission shall, in its discretion, impose any or all of the following sanctions: a) Suspension or revocation ofthe Certificate of Authority to operate b C Other sanctions within the power of the Commission. A basic fine of not less than Ten Thousand Pesos (P10,000) and for be more than One Hundred Thousand Pesos (P100,000) as a Financing Company after proper notice and hearing; each day of continuing violation, but in no case shall the total fine basic penalty of Ten Thousand Pesos (P10,000.00) and shall remove the website. Given the gravity and surrounding circumstances in the instant case, the Company shall pay the 11. THE RESPONDENT ALSO VIOLATED MC 3 SERIES OF 2022 the Implementation of Bangko Sentral ng Pilipinas Circular no.1133 series of 2021 on the Ceiling/s on Interest Rates and other Fees charged by Lending Companies, Financing Companies, and their Online Lending Platforms (MC 3). On 03 March 2022, the Commission issued SEC Memorandum Circular No. 03, series of 2022 or also provided that non-compliance with Section 5, whether non-submission or implementing an amended Business Plan without prior approval of the Commission, shall have the penalty of Suspension or Revocation of Certificate of Authority, thus offering loans covered by the ceiling, to submit a Business Plan indicating the company's loan products and services as well as the applicable pricing parameters, which must be compliant with Section 3 of MC 3 putting ceiling/s on interest rates and other fees for specific loans offered by LCs,FCs,and their OLPs.It is FurtherSection 5 of MC3 states that the Commission shall require all LCs and FCs,whether or not SECTION 6.Administrative Sanctions.-Non-compliance with this Circular shall subject the FCs and LCs to the following penalties: XXXX C.Non-compliance with Section 5 Violation FCS LCS Late submission of Business Plan P10.000.00 plus P200.00 daily penalty P10.000.00 plus P100.00 daily penalty without prior approval of the Commission Non-submission of Business Plan Implementing Amended Business Plan Suspension or Revocation of CA government agencies in the exercise of their respective mandates and to, its visitorial powers to ensure compliance with this Circular any other regulations being implemented by the Commission, which may include the disqualification of the directors and officers of the erring FCs, LCs, and their OLPs;and further, to the penalties that may be imposed by any courts or other jurisdictions. (Emphasis supplied) The foregoing penalties shall be imposed without prejudice to the Commission's exercise of any and all of its powers, including but not limited penalties that may be imposed by the Commission pursuant to Presidential Decree No.902-A, Republic Act No.11232,otherwise known as the Revised Corporation Code of the Philippines, and all other relevant laws, rules, and C Scan the QR to verify the document Exchange Commission Securities and PINI BAGONGPILIPINAS Jia Financing Inc. Page 4 of 4 In the Matter of More so,as disclosed in its AnswerJia typically lends amounts of USD $50,000.00 to $200,000.00 per business operations, it failed to disclose that it will operate a website for whatever purposes it may serve. client". Such loan amount or products were not disclosed in its Business Plan as it provides the following While the Company submitted its Business Plan on 19 May 2023, indicating all its products and Template forIl (4 Loan Products and Pricing Parameters ANNEX D Typeofloan d 1y103 Mas Lanvata Minimun (a3 day Tenor Lo Nominal Munthly and Chargen Other Pees B d e Interest Rate 1 Efecive Monthly Fees/Penalties SV D 0ss m Mode of Payment .oi Thio Finnncing 3: 1 weck to onty 1% to % per mont Nor to per month transOCPDC Yo F apitn Php 20,000 Php 1,00000 12m I week to 1% to 5% be O 1% Io 5% O per montn 1% to 5% trnstor.OTC.PDC owallet,ban Certificate of Authority. The non-disclosure of these material changes in its operations warrants the suspension of its THOUSAND PESOS P10,000.00) in violation of the FCA-IRR and remove its website,Jia.ph. Certificate of Authority with No.F-23-0049-36 of Jia Financing Inc.is hereby SUSPENDED for a period of sixty-days (60) from the issuance of this Order.The Company is likewise ordered to pay the penalty of TEN WHEREFORE,in view of the foregoing,for the Company's violation of MC 3,series of 2022,the This Order shall be immediately executory. SO ORDERED July 2025,Makati City 0 ATTY.KENNETJAY A.QUIMIO Xm Olc Director C oe Scan the QR to verify the document