“I used to think that if this does not end, the next step for me will be suicide,” Karan, a 26-year-old from Indore, told MediaNama. It all started when he installed an instant loan app in October 2020 after seeing an ad on Youtube. Facing financial difficulties, Karan took out a loan for Rs. 3000 with a repayment period of 7 days through the app. 

Within 4 days, customer executives of the app started calling him, asking him to pay. Due to exploitative interest rates, his repayment amount was Rs. 6000, and in order to pay it, he decided to take out another loan from a different app, for which he would have to repay Rs. 9000.

I was trapped in the cycle for two months, and eventually, just to pay off my Rs. 3000 loan, I paid somewhere between Rs. 70,000 to 80,000 to different loan apps. I sold my bike, my family’s gold, I was in a very bad situation. — Karan

Karan recalls that the ad on Youtube painted a flowery image – an instant loan for Rs. 50,000 and a duration of 12 months, with a small interest amount. When he opened the app, however, the actual loan duration was 7 days, and the approved loan amount was just Rs. 3000.  While Facebook and Google’s ad policies disallow such loan apps from advertising, many such ads have snuck under their radar amid the pandemic to target vulnerable Indians like Karan.  

Digital ads are not regulated by the Indian government, and social media platforms have little incentive to turn down ad revenue. Predatory loan apps…

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