In reference to an article published in the Sunday Observer on December 17, 2017 titled ‘Beware of Dubious “Virtual” Lenders’, Lendtech Lanka Pvt Ltd, which utilises the digital service platform provided by Cashwagon, has sent the following response through its lawyers- Varners.
““We are a duly registered company in Sri Lanka in the business of digitalised lending (on a micro level) to recognised customers. Our operational method is now accepted in many countries as a hassle free and paperless method of accessing relatively easy credit, particularly for urgent personal matters.
“We accept no deposits whatsoever from our customers. Hence, we are not a bank, finance company or a micro finance entity and are therefore not required to be licensed under the Banking Act. No. 30 of 1988, the Finance Business Act. No. 42 of 2011, or the Microfinance Act, No. 6 of 2016 with any Government entity. As stated before, our only business is short term money lending at a micro level to verified customers.
“In addition, Cashwagon (Pvt) Limited, also a duly registered company in Sri Lanka, does not take any deposits or lend out money and only provides a digital service platform for micro loan providers. Accordingly, we utilise the digital service platform provided by Cashwagon to conduct our legitimate business activities and to connect and interact with our customers in Sri Lanka.
“For the purpose of establishing identity and credit worthiness of a customer, we require certain information of the customer (and the references of contact persons to verify the information given by the customer) which are basic in nature and in any event much less than the details a customer would have to provide a banking/finance institution ordinarily, when borrowing. We also guarantee the security of any information provided to us, unless used in a lawful and authorised manner.
“The said article also purported to carry opinions of some officials which are out of context, hypothetical and irrelevant in the business model we follow.”
Reporter’s note
The article was published with the intention to educate the public to be cautious when obtaining loans as the paper received several complaints about the said platform - Cashwagon stating that this platform provides loans at hefty interest and additional fees calculated on the tenure of the loan.
This is in light of several reports that Sri Lankans are becoming increasingly gullible to international fraudsters on the digital space possibly due to lack of technological and financial literacy.
Hence, the focus of the article was to carry the message to the public made by the Director at the Department of Supervision of Non-Bank Financial Institutions of Central Bank, that the public should be cautious when obtaining loans from suspicious lenders as it could be bundled with other catches. It has to be noted that at no point in the article, the writer had contested the legality of Cashwagon’s operation.