How Predatory Chinese Microloan Apps, Available On Google Play Store, Are Targeting Unsuspecting Indians

OPED By Vaishali Basu Sharma Last month Indian law enforcement apprehended 12 people from the National Capital Region for running an extortion racket in the garb of a Chinese

lending application. These loan rackets primarily operate via phone apps easily downloaded on the Google Play store. Offering easy loans with no paperwork, as low as a few thousand

rupees, the loan app hacks the user’s phone, steals all data and contacts, and begins a tormenting cycle as the representatives of the loan apps employ high-handed collection

strategies. How Chinese Microloan App Scams Work The popularity of these micro-credit loan apps can be traced to pandemic-induced lockdowns and economic slowdown, which saw

large-scale layoffs and pay cuts. In one of the steepest declines, India’s Industrial Production fell by 16.7% in 2020, exposing many workers to job loss. The poorer sections of

society felt the worst effects of this. Micro-credit or small loan serves as indispensable supplementary loan for people lacking verifiable credit records or unqualified to get

conventional bank loans. Marginalized by banks and other financial institutions, many became easy targets of fraud lenders. There is no dearth of Chinese scammer apps offering

small loans on the Play store to those who may find it challenging to get loans from a bank or a trusted non-banking financing company (NBFC). Thousands of unsuspecting Indians

have fallen prey to illegal, unlicensed, and fraudulent lending apps from China. File Image According to consulting firm Deloitte India, Chinese apps use grey areas of legislation,

“Through these apps, fraudsters target the low-income groups or the not-so-savvy financial people, wherein a smaller amount of money is lent. The modus operandi usually involves

deduction of processing fees from the loan, combined with penalties, and at significantly higher interest rates in cases of delay in payments.” People taking these loans did not

understand the terms and conditions of the loans they were getting and were unaware of how incredibly high the interest rates were. Raise Cash, Cash Ray, Mobipocket, Infinity Cash,

Kredit Mango, CB Loan, Cash Tree, Minute Cash, Cash Light, HDB Loan, SnapItLoan, Go Cash, and OK Cash are just a handful of hundreds of credit apps available for download on the

Google Play store. The popular ones had more than one million downloads within a few months of launch. These apps usually list a domain, but the web address does not open, and the

reviews are almost all fake. Charging usurious interest rates, these Chinese loan apps use illegal and predatory practices to recover loans from their victims. They misuse users’