The Federal Competition and Consumer Protection Commission (FCCPC) has taken a decisive step in regulating the digital lending landscape, issuing a stern ultimatum to digital money lenders to prove their adherence to established guidelines within five days.
This move comes in response to concerns about the operation of some digital lending platforms and their potential to exploit vulnerable borrowers.
The FCCPC, as part of its drive to ensure consumer protection and ethical lending practices, has also directed Google to remove 18 digital lending applications from its Playstore platform.
These applications were flagged for operating without regulatory approval or violating the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022.
Highlighting the significance of regulatory compliance, the Executive Vice Chairman/Chief Executive Officer of FCCPC, Babatunde Irukera, emphasized that adherence to the established guidelines was not merely optional, but mandatory for all digital money lenders.
He underscored that the commission’s directive applied regardless of whether lenders intended to operate on Playstore, employ APK (Android Package Kits) file formats, or explore alternative means of reaching consumers.
The FCCPC’s decision to take swift action was partly prompted by its prior experience with certain digital money lenders.
In a previous incident, two loan apps, Getloan and Camelloan, were delisted from Google Play Store due to reports of harassment against Nigerian borrowers. During subsequent investigations, the FCCPC discovered duplicity among legally registered digital money lenders, leading to a thorough review of the sector.
The commission’s list of 18 delisted apps includes familiar names like Joy Cash-Loan Up to 1,000,000, Nairaloan, Cashme, Eaglecash, and more.
The FCCPC has underscored that some digital money lenders were using alternative methods, such as APK file formats, to bypass Google Playstore and evade regulatory scrutiny.
Furthermore, Irukera clarified that all previously approved digital money lenders, regardless of their operational mode, are required to revalidate their information with the commission.
Non-compliance with the guidelines, he warned, could lead to severe consequences, such as permanent delisting and potential legal action, including prosecution.
As the digital lending landscape continues to evolve, the FCCPC’s proactive measures indicate a commitment to safeguarding consumer interests, promoting transparency, and ensuring the responsible conduct of digital money lending services in Nigeria.