Dark Side of Digital Loans: Secret Apps Charge Huge Interest, Threaten Users
A new and dangerous trend of illegal loan apps is growing in Bangladesh. These apps offer quick money but demand very high interest rates. People who cannot repay face severe threats and harassment. Prothom Alo, a newspaper, found at least 30 such apps operating illegally in Bangladesh.
Shaheen Hossain, a private sector employee, faced this problem. Last June, he borrowed Tk 6,000 in stages from an app called FinCash. He ended up paying nearly Tk 10,000 back. This meant an interest rate of 800 percent. Shaheen refused to pay more when the app demanded it. He then received threats on WhatsApp. The threats said his personal phone data would be leaked. His relatives would also be contacted. Shaheen repaid the money after many threats. He swore never to take such a loan again.
These apps often advertise on Facebook. When someone downloads an app, it takes data from their phone. This includes photos, videos, contacts, and messages. The apps do this without the user’s permission. Then, they demand huge interest on the loans. If users cannot pay, they face strong harassment.
This problem is also very serious in other South Asian countries. In India, a young man named Narendra took a 2,000 Rupee loan. He was harassed and threatened with fake images of his bride. Narendra later took his own life. This was reported by NDTV on December 12, 2024.
In Bangladesh, legal loans come from banks and microcredit groups. Even so, there is a demand for urgent and easy loans. Illegal loans, online gambling, and digital currency trading are banned in Bangladesh. Only registered companies can offer money services. Yet, these illegal app-based services continue to operate.
Arif Hossain Khan, spokesperson for Bangladesh Bank, said he did not know about these apps. He told Prothom Alo that the central bank will raise awareness. They will teach people about the dangers of fake digital loan apps.
Many illegal apps have been found on Google Play Store. Their names include Bongo Cash, Dhaka Fin, Taka Now, and Easy Taka. Some apps use names similar to real microcredit groups. For example, ‘Sathi Loan’ offers loans up to Tk 150,000. It charges 18-26 percent interest yearly. ‘Quick Loan’ offers up to Tk 300,000 at 18 percent interest. Both apps have been downloaded many times.
Saeed Mia from Mirpur, Dhaka, also suffered. He borrowed Tk 24,000 from an app. A week later, the app demanded Tk 81,000. He repaid Tk 54,000. Saeed said his friends were called and threatened when he refused to pay more.
When applying, users must give their National ID details. They also link their mobile money accounts like bKash. The money is sent to these accounts. The apps require access to phone contacts, photos, and messages. If access is not granted, the app does not work. This lets operators get all user data.
Web data shows these loan apps are used more and more in Bangladesh. The company SimilarWeb reported this. These app operators have no office or known address. Their identity is hidden.
The US Department of Justice spoke in April. They said online scam groups are active near Cambodia, Laos, and Myanmar. These groups cause huge financial losses globally. The Indian government has already taken action. By June, India had shut down 3,718 such apps.
Few victims in Bangladesh have filed complaints with the police. Experts warn that action is needed quickly. Otherwise, this fraud could cause big losses for individuals. It could also increase money laundering. Professor BM Moinul Hossain from Dhaka University said these crimes keep changing. He blames a lack of user awareness and weak action by police and regulators.
