India has continued its crackdown of Chinese-owned online loan apps. India’s financial fighting agency raided the offices of fintech Paytm and Razorpay and Cashfree on Friday according to TechCrunch.
Friday raid was the latest in a series of investigations into the activities of loan apps in the country. The raid affected high-profile India firms and businesses controlled by Chinese after several complaints and petition alleging “extortion and harassment of the public who had availed small amount of loans through the mobile apps.”
“During enquiries, it has emerged that these entities are controlled/operated by Chinese persons. The modus operandi of these entities is by using forged documents of Indians and making them as dummy directors of those entities, they are generating proceeds of crime,” the agency said.
“It has come to notice that the said entities were doing their suspected/illegal business through various merchant IDs/accounts held with payment gateways/banks,” the agency added.
The entities operated by Chinese personnel were generating “proceeds of crime through merchant IDs/accounts held with payment gateways/banks,” the Enforcement Directorate said. The agency said that there were discrepancies in the registered addresses the companies gave to the local authority.
In India, many of these Chinese-owned apps use unethical means to recover their loans, which include blackmail and threats. TechCrunch reports that the country’s central bank is moving ahead with new guidelines to regulate digital lending in India. The guidelines will make it mandatory for companies to provide more disclosure and transparency to benefit consumers as well as restrict several business practices.
Nigeria too not left out
The Federal Competition and Consumer Protection Commission (FCCPC) last month ordered fintech companies to stop providing payment and transaction services to digital money lenders, also known as loan sharks.
The executive vice chairman of the FCCPC, Babatunde Irukera told reporters during an enforcement exercise at the premises of some lenders in Lagos. The FCCPC vice chairman directed fintech companies including Flutterwave, Opay, Paystack and Monify to desist from servicing digital lenders under probe.
In addition, Mobile Network Operators (MNOs) were also asked to stop providing server, hosting or other services to the companies.
While addressing the press, Irukera said the Federal High Court had already empowered the commission to search and seize properties of subjects of investigation.
“The information available to the commission demonstrates that Soko Lending appears to be the most consequential digital money lender with multiple apps and brand names.
“It covers a significant share of the digital or online lending market, and is one of the most prolific actors in violating consumer privacy, fair lending terms and ethical loan repayment/recovery practices”, he said.
