The Cost of Convenience: Identifying, Analyzing, and Mitigating Predatory Loan Applications on Android

TL;DR

This study measures and analyzes the compliance of digital loan apps across several countries, revealing widespread violations of regulations and policies, and demonstrating the need for improved enforcement and technical safeguards to protect users.

Contribution

Introduces a novel cross-country measurement methodology combining policy translation, static, and dynamic analysis to assess loan app compliance at scale.

Findings

Widespread non-compliance with regulations among approved apps

Apps transmit sensitive data before user consent

Google removed over 90 problematic apps after disclosures

Abstract

Digital lending applications, commonly referred to as loan apps, have become a primary channel for microcredit in emerging markets. However, many of these apps demand excessive permissions and misuse sensitive user data for coercive debt-recovery practices, including harassment, blackmail, and public shaming that affect both borrowers and their contacts. This paper presents the first cross-country measurement of loan app compliance against both national regulations and Google's Financial Services Policy. We analyze 434 apps drawn from official registries and app markets from Indonesia, Kenya, Nigeria, Pakistan, and the Philippines. To operationalize policy requirements at scale, we translate policy text into testable permission checks using LLM-assisted policy-to-permission mapping and combine this with static and dynamic analyses of loan apps' code and runtime behavior. Our findings reveal pervasive non-compliance among approved apps: 141 violate national regulatory policy and 147 violate Google policy. Dynamic analysis further shows that several apps transmit sensitive data (contacts, SMS, location, media) before user signup or registration, undermining informed consent and enabling downstream harassment of borrowers and third parties. Following our disclosures, Google removed 93 flagged apps from Google Play, representing over 300M cumulative installs. We advocate for adopting our methodology as a proactive compliance-monitoring tool and offer targeted recommendations for regulators, platforms, and developers to strengthen privacy protections. Overall, our results highlight the need for coordinated enforcement and robust technical safeguards to ensure that digital lending supports financial inclusion without compromising user privacy or safety.