Say the difference plainly.
A micro-lender gives relatively small cash loans to individuals. Security is usually salary, income and affordability. If the customer defaults, you pursue repayment through lawful collection. Main risks: non-payment, fraud, weak affordability checks. Approval: a full NBFIRA micro-lending licence.
A pawnshop gives a short-term loan against an item physically handed over — jewellery, electronics, vehicles, other movables. On default, the pledged item may be sold under the contract and the rules. Main risks: bad valuation, stolen goods, damage, theft, hard-to-sell stock. Today this sits under NBFIRA exemption pending pawnshop-specific law — not the same as a full micro-lending licence.
The P20,000 trap
Micro-lending applications expect CIPA registration, BURS tax, a business bank account, a commercial address (not residential), fit-and-proper officers, AML/CFT policies, and at least P20,000 minimum liquidity kept at all times.
That P20,000 is a regulatory liquidity reserve — not proof you have enough capital to lend. One hundred loans averaging P2,000 already imply P200,000 in book before rent, salaries, systems and defaults.
Special licence companies start from P10,000 on our pricing path — scoped to the industry after a brief.