Zerodha co-founder Nithin Kamath raises concerns over predatory Loan Apps

In a climate of escalating instances of harassment by predatory loan apps, Nithin Kamath, the founder of Zerodha, has issued a stern warning to the public to be cautious of these dubious platforms. He reminded individuals of the existing legislation in place to protect them against harassment by the agents of such digital loan platforms.

Kamath suggested that the victims of such fraudulent activities should waste no time in lodging a complaint with authorities.

“If you are a victim of harassment, file a complaint at or call 1930. We have laws that protect you from harassment,” Kamath suggested in a LinkedIn post.

The Zerodha co-founder also raised concerns over a spate of suicides due to harassment by loan agents of shady and illegal predatory loan apps.

High cost of loans from fraudulent apps

Kamath highlighted that these deceptive applications lend at exorbitant rates, often soaring as high as 100-200 per cent. On installation, these apps gain access to all contacts and photos on the customer’s device, which they then exploit to harass borrowers who fail to make their loan repayments.

The Zerodha founder remarked, “It’s beyond belief to share so much information for a loan. It’s equally nonsensical to borrow money at rates of 50-100% per year. For most people, repaying the principal at such rates is next to impossible.”

Predatory apps: Illegal and unregulated

Kamath underscored that a significant majority of these apps operate illegally and without any regulatory oversight. He drew attention to the fact that users frequently discover such disreputable applications on app stores, and urged these platforms to implement more stringent filters to weed out these unsavoury apps.

It’s worth noting that these small-time or micro-loan applications often prove enticing for individuals seeking to borrow small sums without excessive documentation. In many instances, mostly millennials and young employees fall prey to these schemes. While considering such loans, people must bear in mind that many seemingly easy offers are, in fact, fraudulent. Most of these applications operate without regulation, employ unethical tactics and charge steep interest rates.

Engineering students dies by suicide over harassment

Kamath’s cautionary LinkedIn post comes in the wake of a tragic incident involving 22-year-old engineering student, Tejas Nair, who took his own life as he struggled to repay loans taken from an online Chinese mobile app offering loans in Karnataka. Nair allegedly suffered torture at the hands of the app’s executives after he failed to repay the loan amount.

His suicide note read, “I am unable to pay other loans that are there in my name and this is my final decision.”

According to his father, Nair was allegedly blackmailed by executives of the app, who threatened to distribute compromising images of him to his family and had already sent a few to some family members.


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