Predatory Loan Apps in India Rake in Huge Fees, Driving Some Users to Suicides

The article discusses the issue of predatory loan apps in India and other developing countries. These apps offer short-term loans with high interest rates, often targeting low-income individuals who are desperate for cash. However, once the loan is taken, the app’s recovery agents use intimidation and harassment to extract payment from the borrower.

Some key points mentioned in the article include:

• The RBI (Reserve Bank of India) has issued guidelines for regulated lending platforms to have fair methods and practices related to loan recovery agents.
• Associations such as DLAI (Digital Lenders Association of India) are looking for a self-regulatory organization (SRO) to address consumer grievances on behalf of their members.
• Market experts suggest that the RBI should set up a grievance mechanism rather than relying on an SRO from the industry.
• The issue is not unique to India, with similar predatory loan app patterns found in other developing markets such as Mexico and Kenya.

The article also mentions some potential solutions:

• Governments could deploy privacy labels on their app stores to communicate risks involved with loan apps and restrict privacy-violating behavior.
• Similar policies could be put in place by governments for mobile loan apps, forcing the hand of mobile app stores and developers to meet minimum privacy standards for data collection requirements and uses.

Overall, the article highlights the need for effective regulation and oversight of predatory loan apps to protect consumers from exploitation.