After getting removed from Google Play and Apple store, illegal loan providers have started to exploit other means to launch their apps to trap people, using channels such as WhatsApp, the Securities and Exchange Commission of Pakistan’s (SECP) said on Tuesday.
Also referred to as nano or micro loan providers and some commentators also call them loan sharks, many such loan providers have been reported to be trapping borrowers with exorbitant rates despite initially marketing themselves as cheap loan providers.
After several reports, the government’s Ministry of IT and Telecom decided to take action against illegal loan apps in July.
In order to safeguard the public from falling into debt traps, the SECP in coordination with Google, Apple and the PTA, has ensured removal of many illegal loan apps that were previously available at Google and Apple Stores.
However, those involved have started to use other means such as Android Package Kit (APK) files to launch their loan apps and use channels such as websites, WhatsApp, and others to trap people.
Authorities to continue crackdown against ‘loan shark apps’ in Pakistan: official
The regulator on Tuesday warned the public not to download illegal apps from any website or link shared through any other source.
“The general public is cautioned that illegal apps available through channels other than the App Store pose serious risks to the users, including fraud, misuse of personal information, blackmailing, harassment, etc,” a SECP media release said.
The commission added that as part of its surveillance activities, seven illegal apps marketed on various websites were identified and action was initiated in collaboration with the Federal Investigation Agency (FIA), and the Pakistan Telecommunication Authority (PTA).
Nano loan apps: borrowers can now take maximum Rs75,000 from different digital lenders
“The shift in illicit app distribution technique is the consequence of actions against illegal lending apps initiated by SECP, in partnership with Google, FIA, and PTA, which resulted in the removal of 120 illegal apps from the Google and Apple App stores,” said SECP spokesperson.
An updated list of illegal apps has been placed on the SECP’s website for public information.
The nuisance of the illegal loan apps came to limelight last year and it peaked when a person in Rawalpindi reportedly committed suicide after being harassed by such loan app operators this year.
Since then, the authorities have taken strict measures against illegal loan providing apps.
It is pertinent to mention that SmartQarza and Paisayaar are currently only two legal apps allowed to offer nano loans.