Chinese instant loan apps are proliferating in India. Thousands of customers are in debt trap

 Ajay Padnekar

Mumbai: (08.12.2020) Instant loans through mobile apps are mushrooming in India. Thousands of complaints have been circulating on social media against such applications known as Chinese lending apps.

One of the methods used to recover the loan is to constantly threaten customers on the phone and to share humiliating posts on their social media accounts. Besides, fake police FIR, fake notices in the name of banks warning to cancel ATM cards and to close bank accounts, and threatening messages to intimidate customers will be sent through WhatsApp messages.

Such companies offer loans to low-income people between the ages of twenty and forty who have lost their jobs during the lockdown. These apps, which offer loans starting from Rs 1,000, charge an interest rate of 30% to 50%, but the loan repayment period is just 7 to 15 days. For a loan of Rs 3,000, customers get less than Rs 2,000 after deducting the processing fees and other charges. But customers have to repay around Rs 3,100 within 7 days. Countries like China are said to be the source of such companies that charge high-interest rates and lure low-income people with having a salary range between 10k to 30 k, who find it difficult to get personal loans from banks into the debt trap.

About 500 such apps were available in the Google Play Store targeting those who lost their jobs due to the lockdown. But some of these apps were recently removed from the Google Play Store.