SECP Warns Against Digital Loan Apps in Pakistan

The Securities and Exchange Commission of Pakistan (SECP) has advised borrowers to thoroughly read through all of the terms and conditions of the loans, including interest/markup rate, services fees, and late payment charges/penalties, before signing up for a loan using digital apps.

SECP officials informed the media here on Wednesday at the SECP Headquarters that borrowers are required to take precautionary measures before taking loans from digital lenders.

The borrowers are also advised to compare relevant documents of different apps at the time of applying for a loan. The licensed Non-Banking Finance Companies (NBFCs) are subject to legal action if any applicable rules are violated or borrowers are given false or misleading information.

Borrowers who have grievances may approach the respective NBFC for settlement and if their concerns are unresolved, they may also file a complaint with SECP through its Service Desk Management System.

Officials added that there are numerous online and mobile apps that offer personal loans, and Pakistan is no exception. Some of these applications are operated by the NBFCs that hold a license from the SECP and some are also licensed by the State Bank of Pakistan (SBP).

With the global popularity of digital nano loans, the licensed digital lending NBFCs have made rapid progress to further the journey of financial inclusion by lending to more than 2.4 million borrowers with the disbursement of over Rs. 63 billion during the last year.

However, with a growing number of loans, the SECP has noticed an increasing trend of borrowers’ complaints against digital loan providers, specifically those involved in nano lending.

These complaints are not only registered directly with SECP’s portal but also on social media forums like Facebook and Twitter, which are flooded with coverage against these loan providers.

The complaints mainly relate to exorbitant interest rates, inadequate/misleading disclosures, loan disbursement without borrowers’ consent, and coercive collection practices.

Given that lending is a licensed activity in Pakistan, there are numerous digital lending apps operating in Pakistan without a license and are, therefore, illegal.

Entering into any loan agreements or dealings with unlicensed apps may have adverse implications, therefore, users are advised to avoid using such unauthorized apps.

Although NBFCs digital lending apps offer quick, unsecured small ticket loans to borrowers and may act as a source of credit for otherwise underserved or unserved strata, the loan rates they charge can be proportionally quite expensive for the reason these are unsecured loans, SECP officials added.


  • Main nay bhi liya tah loan easy loan app say bohat threat kia our interest bhi bht wasool kia hay 7 days ka


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