How Demonic Loan Apps Are Cashing On the Failing Economy Of Pakistan

Written by Muhammad Muneeb Ur Rehman ·  3 min read >

In recent times, Pakistan has found itself in the throes of a daunting economic challenge – a skyrocketing inflation rate that currently stands at an alarming 42%, surpassing the regional average. This dire economic situation has inflicted immense hardships upon the nation’s inhabitants, pushing many to their limits as they struggle to make ends meet and manage their households which forces people to take loans from others. 

In the midst of these trying circumstances, a beacon of hope emerged in the form of a mobile application that promised lucrative loan opportunities, capturing the population’s imagination with dreams of financial relief. These apps offered an expedited route to securing loans without the cumbersome formalities demanded by traditional banks and financial institutions.

In a significant move to protect the public from the hazards of illegal loan applications, the Securities and Exchange Commission of Pakistan (SECP) has managed to eliminate 120 unlawful loan apps from the internet that were previously available to be downloaded. For this purpose not only did the SECP collaborate closely with tech giants Google and Apple, but also with local authorities and regulators like the Pakistan Telecommunication Authority (PTA), FIA, SBP, and NTISB.

As per details provided by the Securities and Exchange Commission, the emergence of illegal personal loan apps in recent times has sparked concerns surrounding issues such as misleading sales practices, violations of data privacy, and aggressive recovery tactics. The commission has already been working tirelessly on the issue however some recent incidents and subsequent hue and cry on social media have brought them back into the limelight.

Despite SECP’s efforts of banning the apps and catching the perpetrators, many other apps are still in business and understandably common people are still using can as desperation drove countless individuals to download these apps, their yearning for financial stability often blinding them to the potential consequences that lurked in the fine print of these digital contracts. This influx of app downloads was staggering; according to a report by Data Darbar, bank apps were downloaded by 4.4 million people, while an astonishing 15 million individuals opted for loan-providing apps. 

Pakistan currently hosts a multitude of such loan application platforms, but a mere total of nine of these have taken the responsible step of registering themselves in accordance with the regulations stipulated by the Securities and Exchange Commission of Pakistan (SECP).

The inherent dangers associated with the installation and use of certain loan apps have escalated into a pressing concern. These apps demand access to sensitive user data, including contacts, image galleries, social media accounts, and even control over the user’s cell phone – a level of intrusion that should raise red flags. What makes this situation even more precarious is the fact that a significant portion of potential app users may not belong to the literate class, rendering them more susceptible to the seductive promises of financial prosperity. Even those from more educated backgrounds can fall victim to the allure of these apps when confronted with desperate circumstances, such as households plagued by hunger and the overwhelming responsibility of providing for their families.

The implications of this troubling trend are far-reaching and warrant urgent attention. Once a subscriber avails a loan from one of these apps, the company often embarks on a distressing and unethical course of action. They gain intrusive access to the subscriber’s contact list, reaching out to their relatives and subjecting them to ridicule, all while aggressively demanding repayment of the loan amount. This degrading experience places an enormous emotional burden on the debtor, often leading to profound states of depression. 

The companies behind these apps have also been known to resort to blackmail, repeatedly attempting to extort funds from their already vulnerable victims. These unethical practices cast a dark shadow over the company’s conduct and underscore a blatant disregard for the well-being and privacy of their subscribers. In fact, the situation has become so dire that individuals like Masood, who have fallen prey to these apps, are now contemplating suicide as an escape from their seemingly insurmountable predicaments.

A significant part of the blame for these horrific incidents rests squarely on the shoulders of the government. It is incumbent upon the government to formulate well-defined regulations to combat this menace. To that end, it would be prudent to seek the counsel of IT experts who possess the necessary expertise to craft regulations that address the unique challenges posed by these loan apps. Moreover, a robust system for the registration and oversight of these applications must be established. Monitoring cells should be put in place to diligently supervise the day-to-day activities of these apps, and in cases of complaints, swift and decisive action should be taken to rectify the issues at hand.

In cases where the government’s efforts to control inflation fall short, it becomes imperative for them to safeguard their citizens from the clutches of corrupt online activities. To this end, Pakistan can take inspiration from Indonesia, a nation that has successfully navigated similar challenges. Indonesia stands as the largest digital market in Southeast Asia, and they have effectively addressed comparable issues by adopting stringent measures against wrongdoers. Moreover, they have implemented a well-crafted set of rules and regulations that have not only safeguarded their citizens but have also facilitated the growth of financial technology in a responsible and ethical manner.

The dire economic situation in Pakistan has, unfortunately, given rise to a proliferation of predatory loan apps that exploit the vulnerable and exacerbate financial hardships. The unscrupulous practices of these apps, including invasion of privacy and blackmail, have devastating consequences for their users. In light of these circumstances, it is crucial to prioritize transparency, consumer protection, and ethical conduct within the financial technology sector. Only through such measures can we hope to alleviate the suffering inflicted by these exploitative loan apps and promote sustainable economic growth for the nation as a whole.

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Written by Muhammad Muneeb Ur Rehman
Muneeb is a full-time News/Tech writer at He is a passionate follower of the IT progression of Pakistan and the world and wants to educate the people of Pakistan about tech affairs. His favorite part about being a tech writer is tech reviews and giving an honest and clear verdict to his readers. Contact Muneeb on his LinkedIn at: Profile