Pakistan Cracks Down On Sketchy Digital Lending

According to the latest reports, the market regulator of Pakistan has recently issued new guidelines for digital lending in the country. Moreover, it also cracked down on several sketchy practices that have become prevalent in the South Asian market.

Crack Down On Sketchy Digital Lending Predominant In South Asian Market

The Securities and Exchange Commission of Pakistan elaborated that non-banking finance companies in Pakistan that pay out loans through digital channels including mobile apps will be now required to disclosure keys fact statements such as:

  • the credit amount they are granting to consumers
  • annual percentage rates
  • duration of the loan
  • all fees and charges

In addition to that, the non-banking finance firms will also be required to share the key facts with consumers through audio, video, emails, or text messages in both English and Urdu languages. In a press release, the regulator stated:

“Any fee not included in the key fact statement will not be charged to the borrower,”

These firms will have no access to the borrower’s phone book or contacts lists or any sort of pictures on the device even if the borrower gives consent in this regard. The regulator further added:

“The lender shall also not be allowed to contact the persons in the borrower’s contact list, other than those who have been specifically authorized by the borrower as guarantors and who have also provided their consent to the digital lender at the time of loan approval,”

Pakistan’s Market regulator has taken this step due to a rise in mis-selling, breach of data privacy, and “coercive” recovery practices of licensed digital lending companies. Furthermore, it aims to safeguard the public interest as well. Neighboring country India also introduced strict rules surrounding digital lending as it has toppled the local fintech industry.

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Laiba Mohsin

Laiba is an Electrical Engineer seeking a placement to gain hands-on experience in relevant areas of telecommunications. She likes to write about tech and gadgets. She loves shopping, traveling and exploring things.

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