ISLAMABAD: Google has agreed to ban non-licensed digital lending apps in Pakistan from Play Store, according to a senior Securities and Exchange Commission of Pakistan (SECP) official.

Addressing a workshop on Tuesday, SECP Executive Director Khalida Habib said the commission has issued guidelines to tackle concerns involving data breaches and coercive recovery practices of licensed digital lending companies.

She added that the search engine giant has agreed to ban all non-licensed digital lending apps from Google Play, also known as the Google Play Store, in Pakistan, most of which are operating from outside the country.

The SECP and the State Bank were coordinating on the issue, after which the list will be finalised to remove the apps, Ms Habib added.

“Under the new rules the cut-off date for the digital lending firms to update their apps is March 27, and the final list [of apps to be removed] will be prepared after it,” she added.

She said 58 unauthorised digital lending apps were removed from Google’s PlayStore after negotiations in January 2023.

The SECP has taken up the matter with the relevant regulatory authorities including the Pakistan Telecommunication Auth­ority, FIA, National Telecommunication and Information Technology Security Board and the State Bank, as well as with Google and Apple for the removal of unauthorised apps, she added.

Currently, there are only 10 licensed Non-bank finance companies (NBFCs) with permission to lend money. These apps are governed by a different regulatory framework as they fall within the domain of SECP, unlike commercial banks that are regulated by the SBP.

“By the end of next month complete white-list apps of NBFCs and the banks will be prepared and forwarded to Google,” the SECP official said.

With the growth of digital lending apps – that allow needy people to secure short-term loans without collateral – a large number of non-licensed entities have sprung up that indulge in coercive and unethical lending practices.

After a series of complaints, the SECP issued ‘Circular 15’ for consumer protection. The circular stipulated minimum mandatory disclosures for the lenders before loan disbursement.

From January to November 2022, the NBFCs disbursed loans worth Rs63.58 billion with the authorities expecting the number to double in 2023.

Published in Dawn, March 1st, 2023