The Competition Commission of Pakistan (CCP) has taken notice of concerns about mobile applications on Google Playstore offering nano/micro personal loans to customers, mostly belonging to the lower and middle-income classes.
Following the appearance of a news report, a primary investigation was conducted and it was noted that the mobile applications on Google Playstore were offering nano-loans without fulfilling legal requirements of the Non-Banking Microfinance Companies (NBMFC) law.
The NBMFC law offers a framework to regulate nano loans of more than Rs10,000, whereas most of these applications are offering loans smaller than this.
Details show that these applications have well over 10 million downloads by the general public. The mobile applications had contradictions between the interest rate/ processing fee charged from the borrower versus the rates advertised.
There were also instances of faulty claims of data privacy and security, collection of personal data on the pretext of offering loans, discrepancy in repayments and the credit range advertised vis-a-vis those offered, the CCP said in a statement.
The commission said that it was the first regulatory body that formally initiated an inquiry into the matter in September 2022 to assess possible violations of Section 10 of the Competition Act 2010, ie, deceptive marketing practices.
The inquiry committee is authorised to thoroughly probe and submit a report to the commission concerning any or all possible contraventions under the Act against all nano loan mobile applications.
Published in The Express Tribune, December 23rd, 2022.
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