Chinese apps creating trouble for Pakistan's financially-crippled population
China-based loan apps are creating troubles and adding more miseries to the life of the already financially cripped population of Pakistan, media reports said.
The locals in various regions of Pakistan have already complained that their financial condition has deteriorated in recent times.
The apps are taking advantage of the situation and trying to target the population which is desperately seeking some fast loans to deal with their regular day needs.
"Facing galloping inflation along with high unemployment and stagnant incomes, more and more Pakistanis are turning to rogue loan apps like WeCash, apparently based in or originating from China, to meet even their day to day needs like paying their electricity bills," reports Pardafas.
Pakistan has become a fertile ground for these rogue foreign loan apps, especially from China, as it is facing an acute financial crisis while its digital finance regulations are poor and lax. These apps, while providing easy credit with high interest rates ranging anywhere between 18-50% per month, threaten the borrower to pay up, eventually leading the borrower into a debt trap.
While a large number of factories are laying off partially or completely closed, millions of people have lost their jobs during the economic meltdown. Since many households and businesses are failing to repay their loans to banks, they are turning to loan apps for financial help. The number of Pakistanis using personal finance apps more than doubled to 19% in 2022 from two years earlier.
Many of these apps, which are nothing but scammers, offer Pakistanis easy loans in exchange for access to their person’s phone data, including their photo gallery and contact list. With the unprecedented economic misery, the local population is facing, they easily fall prey to the promises of these digital loan apps. The loan apps are also cashing in on the cumbersome process and bureaucratic hurdles involved in getting a bank loan in Pakistan which is also with high interest rates, reports Pardafas.