Google removed hundreds of loan apps from its Play Store in Kenya as part of its crackdown on financial services that violate its policies.
Many of these apps were offering short-term loans with exorbitant interest rates and fees, and often required borrowers to grant them access to their mobile phone data, including text messages and call logs, as well as to their phone contacts. This data was then used to harass and shame borrowers who fell behind on their payments, or to threaten their contacts with legal action or public exposure.
The Central Bank of Kenya reported that out of the 381 digital lenders that applied, only 22 had obtained a license by January. The list of licensed lenders includes Tala, a loan provider backed by PayPal; Pezesha, a B2B embedded lending platform; and Jumo, a provider of financial services, including lending.
Google’s crackdown came in response to mounting pressure from consumer protection groups and regulators who had been warning about the harmful effects of predatory lending on vulnerable borrowers, especially in developing countries where access to credit is limited and financial literacy is low.
As a result of the crackdown, many loan apps have been forced to either shut down or clean up their act by offering more transparent and affordable loan products and by respecting borrowers’ privacy rights. Google has also introduced new policies and tools to better protect consumers from fraudulent and deceptive financial services on its platform.