The Chief Executive Officer of the Federal Competition and Consumer Protection Commission (FCCPC), Babatunde Irukera, has said that the Commission was shocked by the number of digital money lenders (loan apps) in Nigeria.
According to him, the just completed registration where 173 money lenders were registered gave a clearer picture of the number of companies operating in the market.
Speaking on an Arise TV program monitored by Nairametrics, Irukera said the Commission discovered that there are over 200 digital money lending companies in Nigeria during the registration. He said many of them started but could not complete the registration before the deadline on March 27.
Some are just preparing to start the business
While noting that not all the registered companies have started lending, Irukera said:
- “There are many people who didn’t meet the deadline as some registrations were still incomplete. The initial deadline was actually January 31. And we’re actually surprised about the sheer number of digital lenders that existed, and ultimately they are probably more than 200.
- “We didn’t think they were that many. But what the framework has also done is that it has brought some honest people who really want to get into the business, but wanted a legitimate and transparent framework. And seeing that the numbers are quite many doesn’t mean that all of them are lending. Many people are also getting licenses to prepare for their businesses.”
What the registration of loan app means
Irukera said the FCCPC and other government agencies came up with the registration after noticing the proliferation and continuing lending and recovery practices that have become not just ethical violations but even violations of law that become abusive and violation of people’s privacy. He said the FCCPC led an interagency team including the ICPC, CBN EFCC, and NCC to develop an interim registration framework to address that.
- “So, what we did was to develop this framework where we needed to know the people in the market, we needed to know who they were, what they were doing, the source of their money, what type of interest rates they were charging, and how transparent they were with respect to their customers.
- “We also want to restrain what kind of information they are able to pull off people’s phones and what they’re able to do with that information, especially with respect to making contact with people on the contact list, and their loan recovery practices; the kind of language the times they call, what kind of things they say,” he said.
- “So, the companies that have been registered now are those who have provided the transparency and the information that sufficiently establishes these facts. We have also partnered with Google to make sure that only companies that are approved under the framework can get on the Play Store because we recognize that that’s one of the most important ways for them to proliferate and get to their customers,” Irukera added.
The FCCPC CEO, however, noted that registration does not mean that all the registered companies are law-abiding, but it will significantly reduce how they violate the law. According to him, with the information provided by the registered companies, the Commission can easily trace them and hold them accountable if they violate any law.