ISLAMABAD , July 20, 2023: The Securities and Exchange Commission of Pakistan (SECP) has said that it is proactively engaged with Google to counter the proliferation of illegal lending apps, The News reported Thursday.
The search engine has already removed 84 illegal lending apps from its Play Store and has introduced a Personal Loan App Policy for Pakistan, which is effective from May 31, 2023.
Pakistan is the sixth country in the world, after India, Indonesia, the Philippines, Nigeria and Kenya, where Google has introduced additional requirements for digital lending Apps.
The SECP announced on Wednesday its commitment to continuously reviewing and reforming policies to foster the development of capital and financial markets.
It promotes ease of business through technology, enhances financial inclusion, reduces entry barriers, and enforces laws transparently to protect people’s rights.
The policy incorporates measures to prevent the listing of such apps and imposes strict requirements regarding access to consumers’ personal data.
Notably, in December 2022, the SECP implemented borrower protection requirements for digital lending non-banking financial companies (NBFCs).
These requirements include the transparent disclosure of fees and loan terms to customers before disbursement.
The SECP prohibits access to personal data, enforces a mandatory 24-hour cooling-off period for loans, and restricts digital lending NBFCs to a single app.
Call agents are required to utilise registered numbers and recorded lines.
However, lenders and agents must adhere to ethical and legal standards prohibiting unfair practices and harassment.
The SECP maintains a robust enforcement system for ensuring compliance. The commission follows a two-tier process for digital lending companies.
The first tier involves obtaining an NBFC license, which entails conducting due diligence, evaluating sponsors and directors, and appointing an independent director.
The second tier includes app approval based on the CSAF auditors’ certificate, which ensures the security of data and apps by assessing disclosure requirements.