The matter of ‘loan shark apps’ was raised on social media by a handful of anonymous accounts, and the app-owners have already clarified that the apps were taken off for various reasons. The Securities and Exchange Commission of Pakistan (SECP) has also taken several measures as a result of which 44 unlicensed digital lending platforms have been reported to the relevant authorities for necessary action. Besides, Google and Apple managements have been asked to disallow apps not duly licensed. Also, the registered companies have introduced steps on SECP advice.
In order to ensure responsible selling, the SECP has made regulatory changes, which, among other things, focus on increased communication with the policyholders, enhanced training requirements, and remedial mechanism in cases of mis-selling.
Contrary to the contents in the said article, the SECP has in writing proposed to the relevant agencies certain actions to streamline the entire spectrum. The role of a regulator is to ensure optimum disclosures that may lead to informed decisions. It is not the responsibility of the regulator to proclaim whether a product or service is appropriate for an individual.
While discussing the domain of digital lending and insurance sectors, some critical elements should also be kept in mind, like financial literacy, financial inclusion, and dearth of diversified products.