Lending Apps that Reports to Your Friends
Imagine borrowing money from the bank and being asked for the names and cellphone numbers of your friends and family. “If you don’t pay your loan on time, we won’t report it to a credit agency,” the loan officer says. “We’ll report it to your friends and family.”
If that sounds unscrupulous, it’s exactly what some lending apps in India have been doing. They’re like payday loan companies in America, charging exorbitant interest rates, but they’re even more ruthless.
As The New York Times reported, these lending apps, which appear to originate from China, do not care about credit scores, but require access to a borrower’s phone, where they grab contact info, photos and text messages. This allows call centers to bombard not just loan defaulters but also their social circle with pleas and threats.
Police in Hyderabad attribute at least five suicides to these lending apps and their pressure tactics.
A 28-year-old cement salesman named Kiran Kumar came close to suicide last summer when he began receiving harassing phone calls. He had initially borrowed the equivalent of $40, but it ballooned to $4,000 (20 times what he earns in a month).
“If I am labeled a fraud in front of everyone, my self-respect is gone, my honor is gone,” Kumar told the Times. “What is left?”
A friend saved him from suicide by helping him pay back part of the loan—enough to reduce the harassment temporarily.
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Compiled and partly written by Indian humorist MELVIN DURAI, author of the novel Bala Takes the Plunge.
[Comments? Contributions? We would love to hear from you about Chai Time. If you have contributions, please email us at melvin@melvindurai.com. We welcome jokes, quotes, online clips, and more.]
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