70% apply for loans from apps despite high interest rates: Survey

A little more than half of the respondents said that they or someone in their family or friends have availed of such a loan, and 67% of those surveyed have been harassed or know of friends and family who have suffered at the hands of loan sharks

Livemint
Published24 Aug 2022, 03:34 PM IST
Some loan apps entice users by giving loans quickly and conveniently with high-interest rates and processing fees. When someone defaults, recovery strategies include contacting and texting others on the borrower’s contact list, morphing images, and more. (Photo: iStock)
Some loan apps entice users by giving loans quickly and conveniently with high-interest rates and processing fees. When someone defaults, recovery strategies include contacting and texting others on the borrower’s contact list, morphing images, and more. (Photo: iStock)

NEW DELHI: Nearly 43% respondents of a survey said they received calls from phone marketers asking them to apply for a loan through an app, and 70% were aware that these apps attract high interest rates and still opted for the loan, according to a survey by Way2News, India’s largest vernacular news app.

A little more than half of the respondents said that they or someone in their family or friends have availed of such a loan, and 67% of those surveyed have been harassed or know of friends and family who have suffered at the hands of loan sharks but 79% of respondents did not know where to complain.

“We conducted a loan app survey in Andhra Pradesh and Telangana, to which 2 lakh people responded. We have seen many complaints concerning loan apps, so we decided to survey to understand the number of people affected. The findings are alarming,” says Venkat Aditya Gunturu, Content Head, Way2News.

In Andhra Pradesh and Telangana, this survey was conducted among users of the Way2News app. At least 200,000 people from the two states took the survey. 65% of men and 35% of women shared their responses, with the majority (44%) in the 21-30 age group. The majority of respondents were from Mahbubnagar (3171), followed by East Godavari (3047) and Nalgonda (2954).

Way2News team asked several questions about loan apps to understand the perception of people in the state toward these micro-credit loan apps.

The apps entice users by giving loans quickly and conveniently with high-interest rates and processing fees. When someone defaults, recovery strategies include contacting and texting others on the borrower’s contact list, morphing images, and more.

According to the police, the fraudsters hack into the app user’s phones and take their data, including bank information, emails, and images. They then start tormenting the user by sending their friends, coworkers, and family the user’s modified pictures.

The Hyderabad police has issued red corner notices against a few Chinese citizens for their connections with these illicit online loan app operations. Google India removed manysuch lending apps from its Play Store. The Reserve Bank of India (RBI) has also established a working group to investigate the operations of regulated and unregulated businesses in digital lending.

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First Published:24 Aug 2022, 03:34 PM IST
HomeMoneyPersonal Finance70% apply for loans from apps despite high interest rates: Survey

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