As per a new report, Opera has broadened into loan apps, which are meant to bring in additional revenue, but their excessive interest rates and short repayment times positioned them in breach of Google‘s Play Store guidelines.
The report comes from Hindenburg Research and states that Opera has four Android apps, CashBean, OKash, OPay, and OPesa, that are targeted at the evolving markets in Kenya, Nigeria, and India. After the report has been published, Opera has refuted Hindenburg’s claims on its Investor Relations website, noting that the report includes ‘numerous errors, unsubstantiated statements, and misleading conclusions.’
Even though Opera says the loans’ interest rates are between a maximum of 12 to 33 percent per year, the real rate is 365 to 438 percent. Those numbers are looking even worse if repayments are late by only one day, going up to 876 percent.
Moreover, the loans are provided over 91 to 365 days, but the real lengths differ from only seven days for OPay, to 29 days for OKash. These are all incredibly lower than the 60-day minimum that Google has implemented for applications on its Play Store.
As dishonest as the apps appear to be, the Play Store reviews demonstrate them to be even worse. Some of these apps took phone numbers from borrowers’ devices, texting or calling them when the payments were late, trying to get the customers to pay, a behavior that stopped last year since it’s illegal. Some of the messages frightened people with a legal action or threatened them with a credit blacklist.
One of the applications has already been deleted from the Play Store, and more could be removed as well, which would have a massive impact on the company’s bottom line. Since the report was published, Opera’s stock price has decreased from $9 to $6.88.