The Securities and Exchange Commission of Pakistan (SECP) has taken a stringent stance against online loan applications, blocking a total of 120 such apps in the country. The SECP has released an updated list of these apps on its official website.
The regulatory body highlighted the emergence of various channels, distinct from mainstream platforms like Google and Apple Play Store, used by these apps. In response, the SECP emphasized the importance of users downloading apps solely from verified and official app stores. The utilization of unauthorized channels poses a significant threat to users’ security and privacy.
This regulatory action follows the SECP’s recent move to impose pricing caps on online apps and digital platforms offering personal loans. The comprehensive set of requirements introduced by the SECP aims to promote responsible lending practices and enhance consumer safety in the digital lending landscape.
In August, the SECP had introduced new rules for online loan apps, specifically targeting predatory practices and ensuring the financial sustainability of borrowers. These rules included setting maximum limits on loans, restricting the loan period, and placing limitations on the use of debtors’ personal data.
The exposure limits on digital lenders and borrowers were implemented to prevent overindebtedness. Individual borrowers from a single loan app are now subject to a maximum limit of Rs25,000, with an aggregate limit of not exceeding Rs75,000 from multiple apps. Additionally, the loan period for nano-loans through personal loan apps has been restricted to a maximum of 90 days.
The SECP’s proactive measures underscore its commitment to safeguarding consumers and fostering responsible practices within the digital lending sector. Users are strongly urged to exercise caution and obtain financial services only from authorized and secure platforms to mitigate potential risks associated with unauthorized channels.
