In its attempt to prevent applications from accessing sensitive information from different apps installed on an Android device, Google has announced an important shift in its Google Play developer policy. The move is aimed at preventing an application from accessing installed app inventory on an Android device till the time it impacts its ability to undertake core user-facing functions.     

The decision is being seen as a step towards ensuring strict user privacy. However, it can pose quite a challenge to the many lending businesses and loan apps functional in India that depend on alternate data like installed applications on the device to assess creditworthiness.

The emergence of smartphones and economic mobile internet has led to the flooding of lending apps in the country which have become immensely popular amongst college students, those employed in informal sectors as well as those involved in small business with no credit history. Simply put, these apps are unsecured small-ticket loans that need no collateral.  

However, many such apps require the users to furnish sensitive information like contacts, location data, data from other apps, text messages, as well as personal data to check creditworthiness, track borrowers in the real world and reduce the risk of defaults.

The Reserve Bank of India (RBI) has already issued a warning regarding the misuse of device data by lending platforms. The central bank also made it mandatory for the digital lending platforms to reveal the names of the partner banks and NBFCs to all consumers and SMB customers.

Google has also initiated action against loan apps that did not follow its policies for loan repayment terms. Its Play Store policies require financial services apps that offer unsecured or secured personal loans to provide important information on the store at the time they submit the app.   

It is widely believed that the move will impact quite a few Indian apps, especially those that fall in the lending tech category where data collection is rampant and often unchecked. The implementation of the new Google Play developer policy will make it difficult for “predatory” digital lenders to misuse borrower’s data, their locations, track user activity, harass contacts sourced from their devices etc. It would also put a lid on the aggressive collection tactic used by such suspicious apps.

As more than 95% of Indian smartphone users use android, fintech apps extensively rely on Play Store and the policy updates announced by Google is bound to bring about greater transparency that will effectively curb the high handed nature of lending apps as they would now not be able to function in an arbitrary manner which augurs well for both Google as well as its users.