SECP introduces a digital financing initiative for NBFCs

SECP introduces a digital financing initiative for NBFCs. According to news sources, the Securities and Exchange Commission of Pakistan (SECP) started a Digital Lending project for Non-Banking Finance Companies (NBFCs) on Monday, May 30.

Under the project, NBFCs would be able to finance projects by using remote technologies and computer-aided systems to process loan applications. Under S.R.O.603(I)/2022, the SECP told the government about the project.

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The SECP says that the initiative would use digital, technology-based, or internet-based channels or tools with little or no human involvement to process loan applications, approvals, payments, and repayments. Here are the things that are said in the notice:

Lending NBFCs must follow the rules that the Commission sets out in a circular for all or a specific type of lending NBFCs, including but not limited to digital lending;
Fair treatment of customers and borrowers, such as coming up with the correct pricing policies and information;
Read: SECP allows NBFCs to give loans through government programmes.
Adequate and correct disclosures to borrowers, customers, and other stakeholders, including but not limited to the products, services, and terms and conditions that apply to them;
Information technology, systems, and information security measures; minimum disclosure requirements for digital applications, websites, and other platforms NBFCs for licenced activities.

Also, the notice emphasised the idea of “Robo Advisor,” which will be a client-facing product that is automated and based on an algorithm, with little or no involvement from a human adviser. A study and evaluation of the market will also use platforms like artificial intelligence (AI).

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