No more trips to the bank for a loan. No more running from door to door of NGO workers or microfinance institutions. Just by providing some information through your smartphone, you can get small loans. Sounds great, right? These apps encourage you to take loans simply by downloading them. If you meet the necessary conditions and apply for a loan, you get the money easily. Sorry for what I have been saying so far because now I have to tell you the opposite. They primarily target low-income people in financial distress and unemployed students. After applying for the loan, customers are being deceived by having to pay high interest rates instead of the promised low interest.
Around 2021, the Cyber and Special Crime Division of the Dhaka Metropolitan Police (DMP) conducted a series of raids in the Dhanmondi, Banani, and Mirpur areas of Dhaka, the capital of Bangladesh. They arrested five members of a fraudulent gang operating illegal interest businesses under the guise of app-based digital microfinance.
High-Interest Loan Apps
Due to Bangladesh being a low-income country with a high unemployment rate, a fraudulent gang has targeted this demographic under the guise of e-loans or digital microfinance, charging exorbitant fees and deceiving people. If a customer applies for a loan of 3,000 BDT, only 2,190 BDT is disbursed after deducting a processing fee of 810 BDT. After seven days, the customer must repay a total of 3,018 BDT. If not repaid within the period, high-interest rates are applied daily. Additionally, they justify deducting 120 BDT for app fees, 180 BDT for data analysis fees, 15 BDT for value-added tax (VAT), and 5 BDT for interest. The higher the loan amount, the more money is deducted. Customers must repay the loan through bKash or Nagad accounts, with no direct involvement of any individual in the transactions. Many people fall into this enticing loan trap and lose everything.
How to Operate Fraudulent Loan Apps
The gang operates their operations from China. Some Chinese nationals, with the assistance of Bangladeshi citizens, have been running a lucrative interest business through these apps. They attract customers by advertising low-interest loans on social media platforms like Facebook and YouTube. The gang manages several apps such as Tkala – Personal Loans Online (Tkala. Thala-0430), Cashman (Cashman-0514, Cashman-0326), RapidCash – Quick Online eLoans App, AmarCash – Personal Loans Online, Cashkash – Fast Loans Online, and CashCash, offering unsecured loans with excessively high interest rates.
The gang has been operating app-based financial institutions without government approval under the names Thunder Light Technology Limited, Newvision Fintech Limited, and Basic Development Society. They have been collecting customer information without legal authorization.
Safe Borrowing Practices
Respected Audience, We always think of and care for the common people, which are reflected in our content. Your valuable information should never be treated like cheap market goods and sold off indiscriminately. Your personal information is highly valuable. Today, we have presented references from some of the country's renowned media outlets so that you can learn and understand from them.
Never submit your valuable information just for a small loan. We always emphasize ensuring security before providing any personal information after installing an app or accessing a link. We request you to avoid sharing personal information indiscriminately.
App-based Microfinance Risks
By installing an app, an ordinary user might unknowingly grant the app permissions to access their calendar, read events, use the mobile camera to capture photos and videos, read mobile contacts, determine the exact live location, collect phone status and information, and read or modify saved messages on the phone. In such cases, the user's personal data security can be severely compromised.
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