The Federal Competition & Consumer Protection Commission (FCCPC) says it is taking enforcement actions to check the activities of illegal digital money lenders exploiting Nigerians.
Recent investigations have revealed a resurgence of prohibited loan recovery methods, despite stringent regulatory frameworks established in previous years, according to the Nigerian consumer protection watchdog.
FCCPC, in a statement seen by Technology Times, says that in August 2022, on behalf of the JRETF, it introduced the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending. Thereafter, the move directed all the DMLs on Google Playstore to compulsorily register before November 14, 2022, or be removed from the Playstore. The commission later extended the deadline to March 27, 2023, FCCPC says.
By June 9, 2023, the FCCPC had reinstated the registration of new DMLs and observed another trend, unauthorized DMLs were circumventing registration through APKs made freely available on unregistered sites. Via these APKs, access to the private information of consumers was allowed without due process—indeed, in direct contravention of data privacy laws and FCCPC guidelines.
Among those that allegedly broke the rules are Sycamore Integrated Solutions Limited and Orange Loan and Purple Credit Limited, found using APKs to galvanise the borrowers indecently through their apps, ‘Getloan’ and ‘Camelloan.’ The FCCPC therefore permanently delisted these companies and the aforementioned-mentioned apps from Google Playstore and barred financial service providers from associating with them.
However, Sycamore Integrated Solutions Limited seems to have intensified their efforts as they are currently listed on those with full approval of the FCCPC digital money lending apps in 2024, the government agency says.
2024 Relevance
Notwithstanding, these lending practices resurfaced this year, in 2024. Investigations by the FCCPC show that some DMLs still explore regulatory vulnerabilities to the detriment of consumers.
In February 2024, the commission reiterated its stance and says that it was “intensifying enforcement efforts and adopting a zero-tolerance stance towards any exploitation of consumers or abusive misconduct, whether in balance calculations, loan default enforcement, or recovery processes.”
Reports indicate that millions of people look up to these services for quick financial solutions, and today, the digital lending market in Nigeria has become a thing of exponential growth. However, the rapid growth of unregulated lending really poses threats to the privacy of consumers and financial instability.
To mitigate this, the FCCPC advises that consumers must be cautious in their choice of DMLs and to only patronize those on the approved list by FCCPC and available on Google play store as they are already open to regulatory scrutiny.
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