Google to ban digital lending apps from accessing user data

In an effort to combat the spread of predatory lending practices from some lenders that harass borrowers, Google now prohibits loan apps from accessing borrowers’ contacts and photos.

The changes came after the Kenyan loan apps market experienced a series of events in the sector between lenders, regulators and borrowers meant to deal with predatory lending practices in the sector.

Google wants to restrict apps that offer loans to individuals from accessing private user information like images, videos, and contacts.

External storage

On Wednesday, the search engine giant updated its Personal Loans policy for Play Store apps, imposing new limitations that prevent apps from accessing external storage, images, videos, contacts, the exact location, and call records. The modification will take effect on May 31.

“Apps that provide personal loans, or have the primary purpose of facilitating access to personal loans (i.e., lead generators or facilitators), are prohibited from accessing sensitive data, such as photos and contacts,” the company said in its update. In the last four years, a developing trend has caused alarm since some people who have obtained loans through mobile apps were subjected to debt collection harassment.

These debt collectors allegedly gained access to the borrowers’ personal contacts and informed loved ones of unpaid obligations.

Agents have used modified photographs in more severe instances to further intimidate and torment persons who owe money. Tragically, a number of those who were targeted have given in to the pressure and committed suicide.

Such occurrences were extensively covered in markets like Kenya, Nigeria, Philipines and India.

After being notified by law police and central banks, Google originally reacted by removing thousands of personal loan apps from the Play Store. The business also put regulations in place to prevent unregistered loan apps from appearing in the Android app store.

Google says apps that advertise personal loans in Pakistan on the Play Store must submit particular license papers to “prove their ability to provide or facilitate” credit.