SECP cautions against use of ‘unauthorised lending apps MoneyBox and MoneyClub’

The Securities and Exchange Commission of Pakistan (SECP) on Monday caution the public against falling prey to unauthorised lending apps MoneyBox and MoneyClub.

The SECP observed that these apps were gaining the public confidence by using the names of licensed Non-Banking Finance Companies (NBFCs) to offer lending services without any regulatory approval.

“SECP has not granted any permission to its licensed NBFCs, QistBazaar (Pvt) Limited and QistPay BNPL (Private) Limited, to launch MoneyBox and MoneyClub,” said SECP spokesperson on Monday.

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“This unauthorised activity poses serious threat to the public because these applications have been operating without regulatory approvals,” it added.

The SECP maintains a publicly available list of licensed NBFCs and digital lending apps that are permitted to offer lending services.

“The public is encouraged to verify the regulatory status of an NBFC and its authorised app before making transactions with a lending entity,” the spokesperson added.

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“We are acting to protect consumers and promote fairness and transparency in the financial services industry. We are notifying law enforcement agencies to take legal action against the operators of these apps. The SECP advises the public to use authorised apps offered by entities licensed to operate in Pakistan.”

The SECP on Monday also asked the public to register complaints or evidence against the companies involved in unauthorised activities and illegal lending with the Commission.

Last month, SECP wrote to Google and Apple, urging them not to allow unlicensed digital lending applications on their respective app stores.

SECP Chairman Akif Saeed said that applications of unregistered and unlicensed non-banking service providers should not be placed on Google Play Store and Apple Store.

The chairman further added that SECP was collaborating with mobile wallet and digital payment solution providers such as Jazz Cash and Easypaisa to prevent illegal digital lending.

In December, Competition Commission of Pakistan (CCP) started a probe into app-based ‘nano’ and ‘micro’ personal loan providers, with initial findings indicating that the businesses were looking to provide services without fulfilling legal requirements of non-banking microfinance companies (NBMFCs).

CCP said that an initial investigation revealed that these micro loan providers were charging higher-than-advertised interest rates, exploiting mainly the lower and middle income groups.

The CCP said that it has also found instances of faulty claims of data privacy and security from these loan providers and it believed that they collected personal data on the pretext of offering loans.