SECP issues digital lending standards for nano loans

Author: APP

The Securities and Exchange Commission of Pakistan (SECP), taking notice of rising concerns involving mis-selling, breach of data privacy, and coercive recovery practices of licensed digital lending companies, has issued directives to safeguard the public interest and ensure fair treatment of borrowers in the digital lending ecosystem. Through Circular No. 15, SECP has issued digital lending standards applicable on Non-Banking Finance Companies (NBFCs) undertaking lending activities through digital channels / mobile applications (apps), said a press release issued here on Wednesday. The requirements stipulate minimum mandatory disclosures and provision of Key Fact Statement (KFS), before loan disbursement to the borrower. These include loan amount approved, annual percentage rates, tenor of loan, installments/lumpsum payment amounts with date(s), and all fee and charges. To ensure transparency and ease of understanding, the lending app shall display the summary of KFS through a video/audio, screenshot, and email/SMS in both English and Urdu languages.

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