Islamabad, Jul. 18, (dpa/GNA) – Pakistani authorities have launched a crackdown on mobile lending applications allegedly involved in the exploitation of poor clients, officials said on Tuesday, days after a man committed suicide due to repayment pressure.
At least 43 apps had been shut down by the country’s telecommunications regulator as they were found charging exorbitant amounts as interest on the loans they provide, said Salman Sufi, an adviser to the prime minister.
Hundreds of mobile lending apps have popped up in the impoverished nation in recent years as the country plunged deeper into an economic crisis and people struggle to have access to finances.
Most of these apps use social media for their marketing and resort to exploitative tactics for recovery, Sufi said.
Known as loan sharks, the presence of these companies came to limelight this month after a man committed suicide due to pressures by one of the apps to repay the interest and the principal amount he had borrowed.
Sufi said government agencies would continue to isolate and neutralized such apps and the crackdown would continue.
The banking system in Pakistan isn’t big enough to cater to the needs of a growing population and surging poverty, resulting in people easily falling prey to shoddy financial schemes, economist Ishfaq Hassan said.
Digital rights activist Nighat Dad called for criminal investigations against those allegedly behind blackmailing poor customers by making threatening calls to the clients’ families.
GNA