The Money Lenders Association has lauded the Federal Competition and Consumer Protection Commission (FCCPC) for its ongoing efforts to regulate the digital lending sector in Nigeria, describing it as a positive development.
The Chairman of the Association, Mr. Gbemi Adelekan, in an interview highlighted that the FCCPC’s actions have contributed to the growth of online lending applications.
Adelekan, who is also the Managing Director of Kwikpay Credit, noted that online lending applications have seen substantial growth compared to traditional financial institutions over the past few months.
However, he pointed out that this growth has also led to an increase in default rates, largely due to the challenging economic situation and financial constraints faced by some customers.
Adelekan further mentioned that the industry’s expansion has attracted both licensed players and unregistered operators who are infringing on consumer rights.
He recalled that in August 2022, the FCCPC issued interim guidelines for the registration of digital lending platforms in the country.
These guidelines were deemed necessary to address illegal practices within the ecosystem and to promote industry hygiene.
According to Adelekan, the FCCPC has made significant progress in monitoring the sector, continuously investigating and tracking many of the illegally operating digital money lenders (DMLs).
“While most licensed Digital Money Lenders (DML) are operating their loan app business ethically, in compliance with the prevailing laws of the land and lending principles, we also have a few bad eggs in the industry.
“Most of these unscrupulous lenders are unregistered and without the required licenses, thereby contravening various regulations and guidelines introduced by FCCPC and the various regulatory bodies of the government.
“These illegal operators use threatening and arm-twisting tactics as part of their collection strategy,” he said.
Adelekan emphasized that the FCCPC’s ongoing investigations and surveillance demonstrate its commitment to addressing unethical practices in the digital lending space.
He stated that, to date, over 230 digital money lenders have been registered by the FCCPC, with 88 existing loan operators placed on a watch list.
Additionally, the commission has delisted 47 loan apps from the Google Play Store and blocked the bank accounts of lenders found in violation of regulations.
Adelekan urged the public to avoid using illegal loan apps, warning that any loan application approving and disbursing funds without proper verification is a red flag.
“The association advises the general public to exercise caution when applying for loans online and to select only licensed and approved Digital Money Lenders (DMLs) listed on the FCCPC’s website.
This will help reduce the incidence of illegal loan apps that shame and violate consumer rights,” he said.
