The Securities and Exchange Commission of Pakistan (SECP) has asked the general public to always read the terms and conditions carefully before availing of any digital nano loan.
According to the SECP’s “APP Whitelist Update in August 2023”, digital Nano loans are short-term loans with high-interest rates and additional charges. It is essential that the consumer understand the potential risk of overindebtedness.
Borrow responsibly and only take loans that the consumer can comfortably repay within the agreed timeframe to avoid financial difficulties. Always read the terms and conditions carefully before availing any loan, SECP added.
This comes after the SECP imposed exposure limits on digital lenders and borrowers through its Circular 10 of 2023. A maximum limit of Rs. 25,000 has been imposed for individual borrowers from a single loan app, and the aggregate amount of loans from multiple apps has been restricted to not exceed Rs. 75,000.
Further, the loan period/tenor for a nano-loan through personal loan apps has been restricted to not more than 90 days. The exposure limits on borrowers shall promote responsible lending behaviors and prevent borrowers from being trapped in debt cycles due to multiple loans.
The SECP recently restricted unauthorized and illicit apps, collaborating with Google to introduce Pakistan’s Personal Loan App Policy on May 31, 2023. As a result, Google removed 84 illegal lending apps from its Play Store following SECP’s reports.
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