Fake loan apps: What should investors do to protect themselves from these frivolous lending apps?
There is no denying the fact that raising small loans on a lending app is a cakewalk. However, some of these apps are not credible and can abuse your financial data and privacy to dupe you. So, it is imperative to be confident of the app’s credibility before jumping the gun.
In fiscal 2023, there were 1,062 complaints against such lending apps. The Finance ministry had shared the data in Lok Sabha in July last year. In fact, Google removed 134 fake loan apps from its Play Store in one week in September 2023 after a series of complaints were made against them.
Strangely, 12 of these fake loan apps had one lakh downloads and 14 had over 50,000 downloads.
One would wonder as to why one has to knock on the doors of a loan app when one could approach a bank or an NBFC for the same?
To this, Neeraj Gupta, managing director, Branch International, a personal finance app and a registered NBFC, says the borrowers who are refused a loan by banks usually approach these apps while there could be some common customers as well.
ALSO READ: RBI should step up efforts to control illegal loan apps
“Average profile for a lending app is riskier since the borrower may have been declined by a bank, which is why the interest rates charged by fintech apps are higher. We give loans faster, we can do fast approval and disbursal and we can even give ₹2,000 cash to meet mismatch in cash flow," he says.
“In India, regulations are there and fintech players have to catch up with them. In 2022, RBI cracked down on several Chinese apps. However, we lend on our balance sheet and therefore, more credible. and keep investors confident intact," he adds.
1. Affiliation to NBFC: First of all, borrowers should check which NBFC does the app belong to. The
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