How illegal lending apps continue to slip into Google and Apple’s app stores


Gaurav Tyagi

15 reads

Gaurav Tyagi

15 reads

Despite causing untold harm and attracting serious regulatory scrutiny, the scourge of digital lending apps continues to plague India. Even when they are flagged and taken off app stores, they inevitably find a way back in. Here’s how.

September 28, 2023


Key Takeaways

  • Despite the untold havoc they have caused over the past few years, predatory lending apps continue to claim new victims.
  • Government agencies and the broader fintech ecosystem have worked together to curb this menace, and app stores have even introduced new measures to weed such apps out.
  • Yet despite this, they continue to use fraudulent means to slip back into app stores, where they can do significant damage before they are de-platformed.
  • Beyond the harm caused to unsuspecting and often vulnerable borrowers, these illegal apps are also harming India's legitimate fintech lenders.

For the better part of the past two years, stories about predatory digital lending applications (DLAs) have dotted the pages of India’s newspapers. Their exorbitant interest rates and heavyhanded—if not outright illegal—collection practices have caused untold misery across the length and breadth of the country.

During the last three months alone, there have been multiple reports of victims being driven to take their own lives due to the underhanded practices of these operations. In one instance earlier this month, a construction worker and his family in Kerala died by suicide after being harassed by the collection agents of an illegal DLA. With these agents resorting to all forms of harassment—from incessant calls and messages to threats of physical harm and even circulating morphed pictures of borrowers—such harrowing outcomes are hardly isolated incidents.

The government has not turned a blind eye to the scourge of predatory DLAs. However, despite multiple crackdowns and growing regulatory intervention from government bodies, including the Enforcement Directorate (ED), Reserve Bank of India (RBI), Ministry of Electronics and Information Technology (MeitY), and state-level cybercrime cells, these DLAs continue to slip into the app stores of Apple and Google.

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