ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has requested Google to remove 58 unauthorised digital lending apps on receiving dozens of complaints in January 2023.
This was stated by Executive Director SECP Khalida Habib in a workshop on the Non-Banking Financial Companies (NBFC) sector, in light of new regulatory requirements outlined under Circular 15.
She also said that the SECP has consulted with the local regulators including PTA, FIA, NTISB and SBP as well as with Google and Apple for the removal of unauthorised apps and 58 unauthorised apps had been reported to Google for removal in January 2023.
On the other hand, she said that SECP has also held detailed sessions with Easypaisa and Jazzcash (around 83% of BB industry) for identifying mechanisms currently in place for early detection of misuse of these payment channels and any checks that can be introduced to prevent their misuse by illegal lending Apps.
The ED SECP said that the Non-Banking Financial Companies (NBFCs) disbursed Rs 63.589 billion to 2.4 million borrowers in 3.7 million loans. This results in an average loan size of Rs 17,000.
Five out of 10 NBFCs, undertaking digital lending, disbursed Rs 37.4 billion in 2.318 million nano loans, she added.
She explained that SECP has stipulated minimum mandatory disclosures for the digital lenders before loan disbursement to the borrower through Circular 15.
These include, loan amount approved, annual percentage rates, tenor of loan, installments/lump sum payment amounts with date(s), and all fee and charges, as well as Key Fact Statement (KFS).
She further said that SECP has also issued the lending standards to tackle concerns involving mis-selling, breach of data privacy, and coercive recovery practices of licensed digital lending companies.
To discourage non-licensed digital lenders, the licensed digital lender shall be required to disclose its full corporate name and licensing status on its lending platform(s)/App(s), and ensure that any advertisement and publication shall be fair and not contain misleading information, she said, adding that SECP has also specified a comprehensive grievance redressal mechanism over and above the current NBFC grievance redressal framework.
ED SECP Khalida Habib also said that SECP under the circular 15 made prior approval mandatory to launch a Digital Lending App, after seeking compliance certificate from PTA’s approved Cyber Security Audit Firm (CSAF).
In addition, SECP also binds a Digital Lender, its employees, or third-party service providers (agents) for collection of due money from borrowers only using reasonable and legally allowed ways for collection, she added.
