ISLAMABAD: Salman Sufi, the head of the Pakistani prime minister’s strategic reforms unit, said on Thursday authorities such as the Federal Investigation Agency, the Securities and Exchange Commission of Pakistan and the Pakistan Telecommunications Authority were continuing their crackdown against loan apps involved in extorting money through threats and blackmail.

Loan apps have been in the headlines in Pakistan after the death by suicide of a 40-year-old man from Rawalpindi who was unable to return funds he borrowed from mobile apps. His wife told police loan officers from the apps had been threatening him on a daily basis, compelling him to take his own life.

On Monday, Pakistan’s telecommunication regulator said it had blocked 43 rogue loan apps.

“The list of loan shark Apps that were identified by SECP and Blocked by @PTAofficialpk,” Sufi wrote on Twitter on Thursday.

“FIA SECP PTA continue to identify further apps which are built for the sole purpose of citizen exploitation and will continue to block- prosecute.”

The tragic episode of the suicide comes as annual inflation rose to 37.97 percent in May, setting a national record for the second month in a row and adding to Pakistan’s problems of a balance of payment crisis and the risk of a sovereign default. Most people in the nation of 220 million are struggling to cope with a surge in living costs triggered by the government’s devaluing the currency and removing subsidies to pave the way for an International Monetary Fund (IMF) bailout needed to stave off economic collapse.

Against this background, more and more people are turning to mobile-based lenders, creating fertile ground for scams and fraudsters, digital rights and consumer defense groups say.

Many of the apps are regulated, but they too are the source of hundreds of complaints filed so far this year with the country’s capital market regulator, the Securities and Exchange Commission of Pakistan.

Reflecting a jump in smartphone use, the number of Pakistanis using personal finance apps more than doubled to 19 percent in 2022 from two years earlier, boosting low rates of financial inclusion, according to a survey earlier this year by Karandaaz Pakistan, a nonprofit.

But while the apps offer quick, collateral-free credit to the largely unbanked, the boom has led to a surge in complaints about illegal lenders that routinely abuse customers’ data and use aggressive recovery tactics including threats and blackmail.

The country’s capital market regulator, the Securities and Exchange Commission of Pakistan, had by May received 1,415 such complaints against licensed digital lenders and 181 against unlicensed ones, and federal police are investigating apps involved in blackmailing clients.

“It is necessary to bring to justice the elements that take advantage of the compulsions of the people and push them into the darkness of death,” IT Minister Aminul Haque said in a statement this week.