The Federal Competition and Consumer Protection Commission (FCCPC) has taken steps to regulate the digital lending space in Nigeria. To protect citizens from fraudulent loan apps, the FCCPC initiated a registration drive for companies seeking to operate in the digital lending space. After multiple deadline extensions, the registration process closed on March 27, 2023, and the FCCPC has now approved 173 digital lending applications, with 119 having full approval and 54 having conditional approval.
The FCCPC released a ‘Limited Interim Regulatory/ Registration Framework and Guidelines for Digital Lending 2022′ to regulate the digital lending space and make registration and approval a prerequisite for companies seeking to operate in the space. The guidelines mandate different service providers in the relevant ecosystem, such as banks, access/download platforms or stores, technology providers, and payment systems, to require regulatory approval before providing services.
Some of the approved loan apps listed by the commission include Branch International Financial Services Limited, Fairmoney Micro Finance Bank, Pivo Technology Limited, Renmoney Microfinance Bank Limited, Carbon Microfinance Bank Limited, and Creditwave Finance Limited. Loans without the FCCPC’s approval will be removed from the Google Play Store and will not be available for download.
To further regulate the digital lending space, Google Play announced updates to its Developer Program Policy, which mandates that digital money lenders in Nigeria, India, Indonesia, the Philippines, and Kenya must conform to regulatory rules. Google took down hundreds of unapproved loan apps from the Play Store in Kenya in March, and loans without the FCCPC’s approval in Nigeria will meet the same fate.
The Nigeria Data Protection Bureau revealed in February 2023 that a national committee, made up of federal agencies, was working to curb the activities of illegal loan apps in the country. The FCCPC’s efforts to regulate the digital lending space will promote fair, transparent, and mutually beneficial alternative lending opportunities for consumers and establish a clear regulatory framework.
The FCCPC’s decision to regulate the digital lending space in Nigeria comes after reports of loan apps harassing and exploiting borrowers. The regulatory framework and guidelines for digital lending seek to create a level playing field for all operators, promote responsible lending practices, and protect the interests of consumers.
The FCCPC has been working in conjunction with other government agencies to tackle the issue of illegal loan apps in Nigeria. The national committee set up by the Nigeria Data Protection Bureau will work to identify and shut down loan apps that violate the country’s laws and regulations.
The FCCPC’s efforts to regulate the digital lending space have received widespread support from industry players, consumer advocacy groups, and other stakeholders. The move is expected to improve access to credit for millions of Nigerians while protecting them from predatory lending practices.
In conclusion, the FCCPC’s approval of 173 digital lending applications and the regulation of the digital lending space in Nigeria will promote fair, transparent, and responsible lending practices while protecting consumers from the activities of unscrupulous loan apps. With the support of other government agencies and stakeholders, the FCCPC’s efforts will help to build a thriving digital lending industry in Nigeria.