Loan apps have become a concerning issue for the people, the government and Google at the same time. These apps have preyed on innocent people, luring them into signing up for easy, paperless loans that come to bite them later in so many ways. These people taking loans are harassed for payments, and even forcing them into evasive actions in some cases.
Google is being blamed for listing these apps in the first place. Google Play Store is where all these apps are hosted, allowing Android smartphone users to download, sign up and take the loans offered by these nefarious apps. So, ultimately, is it Google’s fault to have them available in the first place? Well, the story is not as clear as it sounds, and Google has shared its views on the loan apps and the following issues faced by people in the country.
“There are a couple of ways to look at it. Is there a real user value from having these apps,” said Saikat Mitra, Senior Director & Head of Trust & Safety, Google APAC. “Since the pandemic and its effect on jobs losses, people have shown that they do need credit, so there is a reason for these loan apps to exist,” he explains the reason for these apps to exist.
He believes that some bad apples are spoiling the whole area, and instead of banning all the loan apps, Google says there should be other stricter checks in place to avoid such apps causing distrust. “We have noticed that whenever a product is used by many users, bad actors follow. The demand for loan apps has catapulted in the rise of these events where people are scammed,” Mitra pointed out.
“Some people may be uncomfortable going to a bank for a loan, or believe they might not be eligible to get the loan.” For these people, such apps have worked to a large extent, thanks to the 99 per cent of good loan apps. But we are completely aware about the 1 percent bad loan apps as well,” he explains.
Dutta also stated that Google doesn’t make money from these loan apps, so it has no agenda having these apps on the Play Store for business reasons. To make things better, Google now wants all these loan apps to list their underwriters clearly, or face strict action such as removal of the app from the Play Store.
Google has a two-layer scan system in place before listing any app on the Play Store and the same is applicable for these loan apps as well. “When you upload an app, it goes through a series of scans. We have our developer policies that clear or reject these apps. Google has both technical and content policy scans. In the technical scan, we look for malware and does it exploit the user’s data, those are all checked. On the content policy side, we check if there is any content that is illegal.
He further went on to explain the process of how the loan apps are scanned. “Even for the loan apps there are a series of checks that are required in terms of specifying the loan rates and other details. The biggest policy change regarding loan apps we have made is the need for a loan app to disclose which underwriter they are tied to very prominently, so that not just Google sees it but the user as well. RBI policy says that the loan app provider should be underwritten by a bank or an NBFC, RBI also publishes a list of NBFCs or banks to block/blacklist them, Dutta points out giving reasons for the new policy in place.
And this change is being forced on all these apps now, as they have to prominently display a link to the partner bank or non-banking finance company. Google has informed that any loan app that does not comply with this new rule by September 19 will be deleted from the Play Store.
Bad Loan Apps Problem Extend To The Real World
Most cases that we have heard about the bad loan apps suggest the incidents are a mix of the digital and the real world. For a person to indulge in one of these bad apps they need to download it on their phone and sign up with their details. But what happens after that is mostly offline, and Google is aware of such issues. “We have to understand that the problem of the loan app is more of an offline bad case, which means all the nefarious stuff is happening outside the app, Dutta elucidates the extent of the bad loan problem.
In such cases, he mentions that Google works closely with the law enforcement to take action against the bad loan apps, which has resulted in removal of over 2000 loan apps till date. The company will be hoping the new measures lessen the impact of these apps that have caused havoc in people’s lives.