After banning almost 200 mobile applications due to alleged links with China and various security issues, the Government of India has now turned its entire focus on various fintech apps, which have links with China.
People who are closer to the new development have told that multiple app-based lenders might be added in the list of banned apps compiled by the Government of India.
According to the source, “The potential implications of a data compromise from fintech such as lending apps are quite grave since it involves sharing sensitive financial data of the user to the lender.” The source also added, users, need to share their private data with these fintech firms, which can be very risky.
Often these app-based lenders ask for data on income tax, Aadhar card, and few other details.
According to the sources, by banning these fintech apps India is trying to prevent Chinese firms from getting hold of Indian data, which in return will eventually protect its own citizen’s privacy.
Currently, start-ups that are into digital lending is in rage. As per new estimates, India’s credit demand is projected to be worth $1.41Tn by the end of 2022. Between FY17 and FY22, the estimated growth rate in credit demand is 3.73%. Additionally, the pandemic has provided am an unprecedented boost to the sector.
For now, the opportunity in the Indian SME lending market is unprecedented. As per a recent report, the public deposits of NBFCs have increased from $293.78 million to $4.95 billion, which results in a massive annual growth of 36.86%.
However, NBFCs with all its positives and potentials, their lending habits have left much to be desired, while many of them closing their shutters due to reckless credit expansion.
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