SECP introduces new rules for ‘loan apps’

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has introduced new rules to regulate online apps offering loans, and to safeguard borrowers.

The SECP said that individual borrowers can now obtain a maximum loan of Rs25,000 from a single loan app, and the total amount borrowed from multiple apps must not exceed Rs75,000.

Additionally, the loan period for nano-loans through personal loan apps has been restricted to a maximum of 90 days. These measures aim to prevent borrowers from falling into debt cycles due to excessive borrowing.

To ensure cyber security and protect borrowers’ sensitive data, personal loan apps are required to obtain a certificate from a PTA-approved Category I Cyber Security Audit Firm (CSAF), the SECP said.

The SECP’s actions seek to promote responsible lending practices, protect borrowers’ financial well-being, and enhance cyber security in the digital lending sector.

Read more: SECP advises borrowers to check legal status of loan apps

Last month, the SECP advised borrowers to review the legal status of digital applications before signing up for loans, as Google introduced a new policy to protect Pakistani consumers from fake loan apps.

The strict new rules regarding loans app are being introduced after the tragic suicide of an unemployed man residing in Rawalpindi, who was unable to repay the interest on a loan obtained from one of these apps. It is believed that the individual had been subjected to blackmail by the operator of the online application.