Before applying for any digital nano loan, the general public is urged to carefully examine the terms and conditions, according to the Securities and Exchange Commission of Pakistan (SECP).
Digital Nano Loans are described in the SECP’s “APP Whitelist Update in August 2023” as being short-term loans with high interest rates and additional fees. The possible risk of being overindebted must be understood by the consumer.
SECP’s Guidelines For Digital Nano Loans
To avoid financial issues, borrow prudently and only accept loans that you can reasonably repay within the specified timeframe. Before obtaining a loan, always carefully study the terms and circumstances, SECP said.
This follows the SECP’s Circular 10 of 2023, which set exposure caps for digital lenders and borrowers. Individual borrowers from a single loan app are only permitted to borrow up to Rs. 25,000, and the total amount of loans from all loan apps combined is only permitted to be up to Rs. 75,000.
Additionally, a Nano-loan obtained through a personal loan app can only have a loan period/tenor of up to 90 days. The exposure limitations on borrowers are intended to encourage ethical lending practices and guard against debt cycles caused by repeated loans.
To implement Pakistan’s Personal Loan App Policy on May 31, 2023, the exchange commission recently barred unapproved and illegal apps. In response to SECP’s complaints, Google deleted 84 unlawful lending apps from its Play Store.
To read our blog on “Loan apps are accused of stealing your personal info,” click here.
