Google has announced stricter guidelines for personal loan apps operating in Pakistan, barring them from accessing users’ sensitive data such as photos and contacts.
In an update to its Personal Loans policy, Google has introduced additional requirements for platforms offering personal loans. The search-engine giant will require lending apps to submit country-specific licensing documentation to prove their ability to provide or facilitate loans.
“We don’t allow apps that expose users to deceptive or harmful financial products and services,” said Google.
The move arrives after several rounds of discussions between Google and the Securities and Exchange Commission of Pakistan (SECP). The regulator received a large number of complaints regarding predatory lending apps and their exploitative practices, which prompted it to step up regulatory restrictions on non-banking finance companies (NBFCs). The firms were restricted to operate only one digital lending app by the SECP.
The updated policy will come into effect on May 31, 2023. Pakistan has joined the list of five other countries with additional requirements set by Google for personal apps. It includes India, Indonesia, Kenya, Nigeria, and the Philippines.
In markets like India and Kenya, concerns mounted too regarding harassment meted out by debt collectors to individuals who availed online lending services. According to reports, their personal data, including contacts and photos, was accessed by recovery agents, who notified their friends and relatives about the unpaid debts.
Collectors are also known to have blackmailed their clients with doctored images, which, in some cases, has led to borrowers taking their own lives.
Google has faced heavy criticism for its failure to devise effective strategies to contain harassment on predatory lending apps, especially in foreign markets. The company’s initial responses constituted blocking lending platforms from the Play Store before it rolled out policy updates mandating these apps to turn in licensing documentation.