To Remove Unlawful Loan Applications, SECP is Working With Google and Apple.
The Securities and Exchange Commission of Pakistan (SECP) has asked Google to evaluate its policies and limit access to its platforms to only authorised digital lending companies. Select media were told by SECP officials at SECP Headquarters that the agency has been actively working with Google and Apple to get illicit loan apps provided by digital lending companies removed.
58 unapproved apps in all had been reported to Google for deletion in January 2023. One such app has also been reported to Apple at the same time. Google has started a review of its policies in response to SECP’s request for the listing of personal loan apps in the future for Pakistani customers. In accordance with its regulations for India, the Philippines, Kenya, Nigeria, and other nations, Google has been urged to restrict the use of its services to only licenced organisations.
According to SECP data, as of October 31, 2022, these licenced digital firms had disbursed Rs. 60.13 billion in 4,254,201 loans, for an average loan amount of Rs. 14,135 each. A total of 108 complaints have been filed against unlicensed apps of digital lending companies since July 2022, according to officials. In this regard, SECP has coordinated with Google and Apple for the removal of unlawful apps in addition to the local regulators in question, including the Pakistan Telecommunication Authority (PTA), Federal Investigation Agency (FIA), and State Bank of Pakistan (SBP).
Sources claimed that some applications for the grant of licences as microfinance organisations are in the process when asked about a rise in the number of loan applications being registered with the SECP. Moreover, only one mobile application can now be run by authorised non-banking financial businesses (NBFCs). Additionally, in order to operate mobile apps or to launch a new app, all NBFCs must present a certificate from PTA-approved cyber security audit companies attesting to their compliance with all SECP Circular 15 of 2022 regulations.
The SECP has issued Circular 15 to establish digital lending standards applicable to Non-Banking Finance Companies (NBFCs) engaging in lending activities through digital channels/mobile applications in response to growing concerns about mis-selling, privacy violations, and forced recovery strategies by licenced digital lending NBFCs (Apps). When a loan is disbursed to the borrower, the circular’s requirements specify a minimum set of obligatory disclosures and the delivery of a Key Fact Statement (KFS).
