Google has a loan app problem in India that doesn’t have a quick fix

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Lending apps have become a worrying issue for the people, the government and Google at the same time. These apps preyed on innocent people, tricking them into taking easy and paperless loans that come to bite them later in many ways. These people who take out loans are harassed for payments, and even forced into evasive action in some cases.

Google is accused of listing these apps in the first place. Google Play Store is where all these apps are hosted allowing Android smartphone users to download, register and take loans offered by these nefarious apps. So, in the end, is it Google’s fault for having them available in the first place? Well, the story is not as clear as it seems, and Google has shared its perspective on loan apps and the following issues faced by people in the country.

“There are many ways to look at it. Do these applications have real value for the user? said Saikat Mitra, Senior Director and Head of Trust and Safety, Google APAC. “Since the pandemic and its effect on job losses, people have shown they need credit, so there’s a reason these loan apps exist,” he explains. be of these applications.

He thinks some bad apples are messing up the whole region, and instead of banning all lending apps, Google says there should be other tighter controls in place to prevent those apps from being mistrusted. “We have noticed that whenever a product is used by many users, bad actors follow. The demand for lending apps has catapulted into the rise of these events where people get ripped off,” Mitra pointed out.

“Some people may be uncomfortable going to a bank to get a loan, or think they might not be eligible to get the loan.” For these people, these apps have largely worked, thanks to the 99% of good loan apps. But we are also acutely aware of bad loan applications at 1%,” he explains.

Dutta also said that Google does not make money from these loaner apps, so it has no intention of having these apps on the Play Store for commercial reasons. To make things better, Google now wants all these lending apps to clearly list their subscribers or be subject to strict measures such as removing the app from the Play Store.

Google has a two-layer scanning system in place before listing any app on the play store and the same goes for these loaner apps. “When you download an app, it goes through a series of scans. We have our Developer Policies that remove or reject these apps. Google offers both technical scans and content policies. In technical scans, we are looking for malware and are they exploiting user data, these are all checked, and on the content policy side, we check for illegal content.

He then explained the process of analyzing loan applications. “Even for loan applications, there are a series of checks needed to specify loan rates and other details. The biggest policy change regarding lending apps that we’ve made is the need for a lending app to very prominently disclose which subscriber it’s linked to, so that not only Google sees it, but also the user . RBI policy states that lending application provider must be underwritten by a bank or NBFC, RBI also publishes a list of NBFCs or banks to block/blacklist them, Dutta points out explaining the reasons for the new policy in place.

And this change is now imposed on all these applications, because they must prominently display a link to the partner bank or the non-banking financial company. Google has informed that any lending app that does not comply with this new rule by September 19 will be removed from the Play Store.

The problem of bad loan applications extends to the real world

Most of the cases we’ve heard about bad loan applications suggest the incidents are a mix of digital and real world. For a person to indulge in any of these bad apps, they have to download it to their phone and register with their details. But what happens after that is mostly offline, and Google is aware of those issues. “We need to understand that the loan application problem is more of an offline bad case, which means all the bad things happen outside of the application,” Dutta explains the extent of the bad loan problem.

In such cases, he mentions that Google works closely with law enforcement to take action against bad loan apps, which has resulted in the removal of more than 2,000 loan apps to date. The company hopes the new measures will reduce the impact of those apps that have wreaked havoc on people’s lives.

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