Google to deny loan apps from accessing user photos and contacts

The move is a bid to stop predatory loan apps from harassing and intimidating borrowers into paying outstanding debts, which often come with huge interest rates.

How users are pressed into paying debts

Failure to pay comes with several social consequences with practices including threats, manipulated obituaries, physical harassment, and haggling of family members applied by these finance loan sharks after debtors fail to repay their loans.

By accessing borrowers’ personal contacts and their personal images, debt collectors have messages and manipulated photos sent to friends and family of these debtors.

Updating the Google policy

Google in a notice, said they’re updating their personal loans policy to state that apps aiming to provide or facilitate personal loans may not access user contacts or photos.

This policy is expected to go into effect on 31 May 2023, and it is being rolled out in markets hardest hit by the practice, like India, Kenya, Indonesia, Nigeria, and the Philippines, as per the press release.

Google said it will also require ‘country-specific licensing documentation to prove their ability to provide or facilitate personal loans.’

The change comes amid mass approval of lenders to operate

This is coming some days after Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) gave approval for 173 digital lending applications to operate in the country. Of these, 119 have full approvals, while the other 54 have conditional approvals.

The regulatory body released a Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending 2022 document to regulate the digital lending space and make registration and approval a prerequisite for companies seeking to operate in the sector. Companies without approval will not be able to operate in the digital lending space.

The FCCPC released a statement in August 2022, outlining its efforts to create a clear regulatory framework for digital lending. The commission stated that the ‘inter-agency Joint Regulatory and Enforcement Task Force has developed and mutually adopted a Limited Interim Regulatory/ Registration Framework and Guidelines for Digital Lending, 2022 as the first and interim step to establishing a clear regulatory framework.’