Mobile apps offering micro-loans have been discovered to be engaging in false advertisements, and illegal collection of private data and have proved to be exploitative overall. However, this facility is provided through unverified channels that have often proved to be predatory across the world, including in Pakistan. Many of the apps involved in this practice have been criticised to be corrupt, having extortionist interest rates, and lack transparency as a whole, and these are problems particularly prevalent in Pakistan. According to the CCP, the apps and companies offering micro loans are yet to fulfill the terms of the Non-Banking Microfinance Companies’ Law according to which a framework for regulations must exist before lending, loans must be valued above Rs.10,000 and interest rates should match those advised. With the malpractices that are occurring, the authorities must create an inquiry committee through which there is greater regulation, transparency in working models, and heavy penalties for those who violate the law.

Source: The Nation December 24, 2022 06:28 UTC