To protect users in Pakistan from fraudulent and unregistered loan apps, Google has created a new screening policy for personal loan applications.
Effective from May 31, the policy mandates that only one Digital Lending App (DLA) can be published by non-banking finance companies (NBFCs). If developers are found attempting to publish multiple DLAs, their accounts and any linked accounts will be terminated.
Google’s move follows recent actions taken by the Federal Investigation Agency (FIA) against illegal finance companies involved in online short-term lending. This move was taken after the tragic suicide of an unemployed man in Rawalpindi, who was unable to pay his debts.
Developers with personal loan apps targeting consumers in Pakistan must complete the Personal Loan App Declaration form and submit necessary documents before publishing their app.
They have to submit proof of approval from the Securities and Exchange Commission of Pakistan (SECP) to offer or facilitate digital lending services in Pakistan.
Google Play will also request additional information or documentation regarding the Loan App’s compliance with applicable regulatory and licensing requirements.
Personal loan apps operating in Pakistan without proper declaration and license attribution will be removed from Play Store. Developers must immediately remove the app from the Google Play Store if the license, registration, or declaration provided is not valid under applicable laws.
“Google is taking preventive measures by setting strict requirements for digital lending apps to reduce financial risk and ensure data privacy. We strongly believe that the new rules imposed on developers of personal loan apps The requirements will provide an additional layer of protection to users, said Farhan S. Qureshi, Google’s Pakistan director.
Under the new set of rules, the DLA is prohibited from accessing sensitive data, such as external storage, media images, contacts and location. While apps offering short-term personal loans, which require full repayment within 60 days from the date of loan issuance, are not allowed.
Pakistan is one of the small group of countries where Google has implemented additional requirements for DLA. The new policy update is an important step towards protecting consumers from harmful financial practices and ensuring data privacy.
