|

A Different Out of Box Approach Needed to Tackle Illegal Loan Apps

The recent announcement of a massive awareness campaign by Securities and Exchange Commission of Pakistan (@SECPakistan) and the Pakistan Telecommunication Authority (@PTAofficialpk) targeting illegal loan apps has sparked criticism from various quarters. Some believe that this approach could inadvertently exacerbate the problem by promoting the idea of obtaining loans through mobile apps.

Also, this is be indirect promotion of registered loan apps that are also bit shady in nature with hidden terms and conditions along with serious privacy issues. To address this issue more effectively, a different strategy is required.

Instead of a broad awareness campaign, the focus should be on implementing stringent regulations. Setting a minimum loan term of 60 days and capping the annualized interest rate at 2.5 times KIBOR (Karachi Interbank Offered Rate) could serve as effective measures to protect consumers from predatory lending practices.

Furthermore, collaboration with tech giants like Google and Apple to ban all non-compliant loan apps would significantly reduce the risk of these apps exploiting vulnerable users. By preventing their presence on major app stores, the reach of such illegal loan providers would be curtailed, safeguarding potential victims.

These apps are massively advertising in video steaming apps like Tiktok, YouTube and Facebook.

PTA should also look in to this part of the issue and in collaboration with these and many other apps they should band those advertisements with out the approval of any relevant competent authority.

It is important to recognize that a blanket awareness campaign might inadvertently provide free marketing for these illegal loan apps, drawing more attention to their existence. Instead, the focus should be on swift action against non-compliant apps, coupled with educating the public about responsible borrowing and regulated lending options.

By adopting a more targeted approach and working closely with the tech industry, the government of Pakistan can effectively curb the influence of illegal loan apps without inadvertently promoting their services. Prioritizing consumer protection and financial well-being will be key to achieving a safer lending environment for all citizens.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *