PAKISTAN: Regulatory Crackdowns against Loan Apps

Pakistan's Securities and Exchange Commission (SECP) has taken a unique approach to digital lending regulation, focusing on expanding ethical, interest-free financial services as an alternative to predatory lending .

Key Actions Taken

Shariah-Compliant Digital Financing Guidelines

The SECP issued new guidelines aimed at expanding the availability of Shariah-compliant digital financing products, making interest-free financial services more accessible across the country .

Permitted Products

Digital financing companies can now launch halal financing products including:

• Installment-based purchase facilities
• Microloans
• Housing finance solutions structured on risk-sharing and asset-backed principles 

Target Beneficiaries

The initiative is designed to improve access to credit for underserved segments including:

• Low-income individuals
• Small businesses
• Farmers
• Freelancers
• Those without formal credit histories 

Strategic Goals

The SECP stated that such products would enhance transparency, improve pricing mechanisms, and raise the overall quality of financial services. The commission is actively implementing a broader strategic action plan to promote a fully interest-free financial ecosystem in Pakistan