Google Tightens Policy Noose On Personal Loan Apps

Tech giant Google has said that it is working on changing its Play Store policy, prohibiting apps that offer personal loans to individuals from accessing sensitive data in the form of photos, videos, location, and contacts.

“We’re updating our personal loans policy to state that apps aiming to provide or facilitate personal loans may not access user contacts or photos,” the company said in a blog.

“We don’t allow apps that expose users to deceptive or harmful financial products and services… If your app contains or promotes financial products and services, you must comply with state and local regulations for any region or country that your app targets – for example, include specific disclosures required by local law,” it said.

The new policy will come into effect from May 31, 2023.

For the policy, Google has defined financial products and services as the management or investment of money and cryptocurrencies, including personalised advice.

The development comes after India has witnessed innumerable cases of harassment by private loan providers over the last few years, including instances of sexual harassment and other cases that have also led to borrowers dying by suicide.

The increasing number of such incidents made the Reserve Bank of India (RBI) introduce guidelines for digital lending in the country last year, which came into effect in December 2022.

Google, in its updated policy, has said that if a loan provider is licenced by the RBI, it is required to submit a copy of the licence for the company to review.

If one is not directly engaged in money lending activities and is only providing a platform to facilitate money lending by registered Non-Banking Financial Companies (NBFCs) or banks to users, they need to accurately state this in the declaration.

Besides, the names of all registered NBFCs and banks will need to be “prominently disclosed” in the app’s description, Google said.

The US-based tech giant said, “We do not allow apps that promote personal loans, which require repayment in full in 60 days or less from the date the loan is issued.”

Google, which is under the government’s scanner for various reasons, including its dominance in the Android and Play Store ecosystems, has been facing pressure from the Indian government for introducing more stringent checks to curb the use of illegal digital lending apps, according to a Reuters report.

Following this, Google claimed that it removed more than 2,000 personal loan apps targeting India from the Play Store for violating its policy requirements.

Meanwhile, with the fintech startup boom in the country, more lending platforms are emerging with newer offerings.

As per an Inc42 report, the country’s digital lending market is expected to reach $1.3 Tn by 2030, growing at a CAGR of 22% between 2022 and 2030.

Besides, Google has also added new guidelines to its device and network abuse policy, and introduced a new account deletion requirement under its user data policy, among others.