The Securities and Exchange Commission of Pakistan (SECP) has released a white list of approved digital lending applications, including nine “Nano Lending Apps” and seven other lending platforms, effective until September 10, 2024. These apps have been reviewed and authorized by SECP, ensuring that they meet regulatory standards and provide consumers with a safe borrowing environment. Nano Lending Apps offer short-term loans with high interest rates and additional fees, and SECP has advised consumers to borrow responsibly to avoid over-indebtedness. SECP emphasized the importance of understanding the risks, urging borrowers to carefully read terms and conditions before taking loans and to ensure they can comfortably repay them within the agreed time to prevent financial difficulties.
The SECP-approved Nano Lending Apps include platforms such as JingleCred Digital Financial Services Limited (Paisayaar), Sight Finance Services (Pvt) Limited (Aitemaad), Walee Financial Services (Pvt) Limited (Hakeem), and JazzCash Private Limited (JazzCash). These apps offer quick access to small-scale credit, which is often used to cover immediate expenses. However, SECP has warned users about the high cost of borrowing through these digital tools and the potential for financial strain if not managed properly.
In addition to Nano Lending Apps, SECP has approved seven other digital lending platforms under various categories such as Earned Wage Access (EWA), Buy Now Pay Later (BNPL), and Business-to-Business (B2B) financing. These include platforms like Abhi Private Ltd, which offers Earned Wage Access, Tez Financial Services Limited (ZoodPay), which operates under the BNPL model, and Cashew Financial Services Limited (Muawin), which focuses on B2B financing. These apps provide diverse financial services, catering to different consumer and business needs. For example, Abhi allows employees to access their earned wages before payday, while platforms like QistBazaar enable consumers to make purchases on credit and pay in installments.
SECP’s release of the white list is part of its efforts to regulate the rapidly growing digital lending industry in Pakistan, protecting consumers from fraudulent or non-compliant platforms. By approving these apps, SECP aims to foster transparency and trust in the financial ecosystem while promoting responsible lending practices. Consumers are encouraged to use only SECP-approved platforms to avoid risks and ensure their financial well-being. As digital lending continues to expand in Pakistan, SECP’s oversight will be crucial in ensuring that these services remain safe, reliable, and beneficial for users.