Google Has A Loan App ‘Problem’ In India That Has No Quick Fix

  • Google is looking at various ways to reduce the impact of bad loan apps on people.
  • Google uses a two-layer scan system before listing any app on the Play Store.
  •  Google has informed us that any loan app that does not comply with the rules will be deleted from Playstore.


Loan apps have become a source of concern for the public, the government, and Google all at the same time. These apps have preyed on innocent users, luring them into signing up for simple, paperless loans that have come back to bite them in several ways. These debtors are harassed for payments, and in some cases forced to take evasive actions.

Google is being blamed for allowing these apps to be listed in the first place. All of these apps are hosted on Google Play, allowing Android smartphone users to download, sign up for, and take the loans offered by these nefarious apps. So, in the end, is it Google’s fault that they were made available in the first place? The story, however, is not as simple as it appears, and Google has shared its thoughts on the loan apps and the following issues that people in the country face.

“There are a couple of ways to look at it. Is there a real user value from having these apps,” said Saikat Mitra, Senior Director & Head of Trust & Safety, Google APAC. “Since the pandemic and its effect on jobs losses, people have shown that they do need credit, so there is a reason for these loan apps to exist,” he explains the reason for these apps to existing.

He believes that some bad apples are spoiling the whole area, and instead of banning all the loan apps, Google says there should be other stricter checks in place to avoid such apps causing distrust. “We have noticed that whenever a product is used by many users, bad actors follow. The demand for loan apps has catapulted in the rise of these events where people are scammed,” Mitra pointed out.

“Some people may be uncomfortable going to a bank for a loan, or believe they might not be eligible to get the loan.” For these people, such apps have worked to a large extent, thanks to the 99 per cent of good loan apps. But we are completely aware of the 1 percent bad loan apps as well,” he explains.

Dutta also stated that because Google does not profit from these loan apps, it has no intention of keeping them on the Play Store for commercial reasons. To improve matters, Google now requires all loan apps to list their underwriters, or face severe consequences such as app removal from the Play Store.

Google uses a two-layer scan system before listing any app on the Play Store, and the same is true for these loan apps. “When you upload an app, it undergoes a series of scans.” We have developer policies in place that allow or disallow these apps. Google has scanned for both technical and content policies.

He went on to explain how the loan applications are scanned. “Even for loan applications, there are several checks required in terms of specifying loan rates and other details.” The most significant policy change we have made regarding loan apps is the requirement for a loan app to prominently disclose which underwriter it is linked to, so that not only Google but the user sees it. According to RBI policy, the loan app provider must be underwritten by a bank or an NBFC. The RBI also publishes a list of NBFCs or banks to block/blacklist, as Dutta explains.

And this change is being forced on all these apps now, as they have to prominently display a link to the partner bank or non-banking finance company. Google has informed us that any loan app that does not comply with this new rule by September 19 will be deleted from the Play Store.


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