The Securities Exchange Commission of Pakistan (SECP) on Monday introduced a series of measures aimed at enhancing consumer protection within the digital loan sector for avoiding fraud claims.
According to the local media reports, the SECP took this step in response to alleged suicides of borrowers due to threats from ‘organized groups’ associated with digital loan applications.
Under the new directives, the SECP has implemented a strict maximum limit of Rs25,000 for loan disbursements at any given time, specifically catering to users of licensed or approved digital loan apps.
Moreover, to prevent excessive indebtedness, the SECP has stipulated that the total loan amount acquired by users from these applications should not surpass Rs75,000.
Additionally, the regulatory body has established a maximum loan tenure of 90 days for personal loan apps, ensuring that borrowers are not subjected to prolonged financial obligations.
The urgency of these measures is underscored by the fact that the Pakistan Telecommunication Authority (PTA) has already taken action by blocking access to 43 loan apps following a distressing incident in Rawalpindi that culminated in a tragic suicide.
The SECP’s proactive initiatives align with the broader aim of fostering a secure and accountable digital lending environment, thereby shielding consumers from exploitation and unjust practices.
As Pakistan’s financial landscape evolves with the advent of digital services, the SECP’s interventions represent a pivotal stride towards ensuring the welfare and confidence of borrowers, upholding the principles of transparency and responsible lending.
