ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) recently announce. That only approve and licensed digital lending apps on their website are considered authorized and legal.
The SECP’s primary focus is on developing capital and financial markets while promoting ease of doing business through technological advancements and ensuring transparency in enforcing laws to protect people’s rights.
additionally, Non-Banking Finance Companies (NBFCs) regulates by the SECP. That is authorize to engage in lending, and some of them have ventured into offering personal loans through digital apps.
Although, to combat the issue of illegal apps, the SECP has been working closely with Google. It resulting in Google introducing a Personal Loan App Policy for Pakistan.
However, this policy imposes additional requirements for digital lending apps and includes checks to prevent illegal apps. Being lists on the Play Store and safeguards to protect consumer’s personal data.
In December 2022, the SECP introduced requirements for NBFCs involved in digital lending to safeguard borrowers’ interests. These requirements include clear disclosure of fees, loan tenure, installment details, early and late payment charges, and more. Access to consumers’ personal data is strictly prohibits. Borrowers are gives a 24-hour cooling-off period to withdraw from the loan agreement after repayment.
SECP Ensures Legal Standards of Lending Apps
The SECP ensures ethical and legal standards are follow by lenders and their agents when collecting loan amounts, prohibiting unfair practices and harassment of borrowers. They have a robust enforcement system in place to ensure compliance.
Companies looking to engage in digital lending undergo a two-tier process, first obtaining an NBFC license and then obtaining app approval based on security measures and disclosure requirements.
To address the issue of unlicensed digital lending apps, the SECP has collaborated with regulatory bodies like the Pakistan Telecommunication Authority (PTA), Federal Investigation Authority (FIA – Cyber Crime Wing), and State Bank of Pakistan (SBP). The SBP issued a circular denying access to illegal apps to banking/payment channels.
The SECP has launched a media awareness campaign to educate consumers about data privacy and their rights, encouraging them to only download approved digital lending apps. The public is advises to review app permissions and disclosure details before signing up. Reporting complaints against licensed apps through the dedicates complaint portal on the SECP’s website. Which is promptly examined and resolve.
