Pakistan's markets regulator issued new guidelines for digital lending in the country, cracking down on several shady practices that have become commonplace in the South Asian market.
The Securities and Exchange Commission of Pakistan said that non-banking finance companies that disburse loans through digital channels will be required to disclose key fact statements such as the credit amount they are granting to consumers, annual percentage rates, duration of the loan, and all fee and charges.
The non-banking finance firms will have to share these key facts with consumers through a variety of methods. The fee that isn't included in the key fact statement won't be charged to the borrowers.
Even if the borrowers consent, these firms will not be able to access the phone book or contacts list on the device. The full guidelines can be read here.
Those who have been specifically authorized by the borrowers as guarantors and who have also provided their consent to the digital lender at the time of loan approval are not allowed to be contacted by the lender.
The regulator noticed a rise in mis-selling, breach of data privacy and "coercive" recovery practices of licensed digital lending companies.
India introduced strict rules for digital lending in order to topple the local industry.
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