HYDERABAD, India — The harassing calls began soon after sunrise. Kiran Kumar remained in bed and, for hours, thought about how he was going to end his hostage of a life.
The cement salesman had initially borrowed about $40 from a lender through an online app to supplement his $200-a-month salary. But he couldn’t pay the mounting fees and interest, so he borrowed from others. By that morning, Mr. Kumar owed roughly $4,000.
Even worse, the lenders had the phone numbers of those closest to him, and were threatening to make his problems public.
“If I am labeled a fraud in front of everyone, my self-respect is gone, my honor is gone,” Mr. Kumar, 28, said in an interview. “What is left?”
devastated by the impact of the coronavirus on the Indian economy.
About 100 loan apps have been removed from the Google platform, according to the Indian government. A Google spokesperson said it reviewed hundreds of loan apps and removed those that violated its terms.
The investigations are raising alarms in India over the vulnerability of a population of 1.3 billion who are still getting accustomed to digital payments. Online transactions in India will reach more than $3 trillion by 2025, according to PwC, the consulting firm. Further fraud findings could spur the government, which has already limited the personal data that online companies can use, to take a tighter grip on the industry.
The apps also speak to the global nature of online fraud. Many of the companies use techniques that flourished in China two years ago before the authorities there shut them down, and that have since reappeared elsewhere.
The loan apps emerged at a desperate time. The government enacted a tough, two-month lockdown a year ago to contain the virus, plunging India into a deep recession. Millions were thrown out of work. Traditional forms of lending, like banks and microlenders, were temporarily closed.
With names like Money Now, First Cash, Super Cash and Cool Cash — according to police documents — the apps came and went on Google’s app store in India, some reappearing with a slight change of identity. Most were built with off-the-shelf software that made their creation as easy as starting a blog, said Srikanth Lakshmanan, one of the coordinators of Cashless Consumers, a collective of technology volunteers who have been studying the apps.