Over 41 Digital Lending Apps popularly called loan sharks in Nigeria are at risk of being shut down by the Inter-Agency on Joint Task Force on the Digital Lending Apps, investigation have reveal.
The Federal Competition & Consumer Protection Commission and the Inter-Agency Joint Task Force established a mutually adopted Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022.
The guideline was necessary to protect Nigerians from blackmail and intrusion of privacy by loan sharks.
Some of the loan sharks charge interest rates that are as high as 50 to 80 per cent of the loan amount, but the FCCPC sought to promote fair, transparent and mutually beneficial alternatives outside traditional banks.
In an Order and Notice of the Commission on August 17, 2022, existing DMLS were required to comply in not later than ninety (90) days to confirm their business is uninterrupted.
The first deadline expired on November 14, 2022 but the FCCPC extended the deadline to January 31, 2023.
But the FCCPC said in a statement made available to Aljazirah Nigeria said many of the digital lenders were yet to comply.
According to the FCCPC, the firms have refused to make disclosures that are necessary for their registration, thereby frustrating the agency’s efforts.
An investigations have revealed that as of January 25, 2023, 65 out of the many DMLs that have received full approval, 41 only received conditional approval from the FCCPC and the joint committee.
They include, “Trippdbase Limited; Owoafar Fintech Service; Afrofirst Mobile And Technology Company Limited; Orcom And Orcom Business Support Limited; Beryl Spring Global Limited; Hometown Fintech Limited; Ajax Lending Limited; Raceova Nig. Limited; Lantana Technology Limited.
“The Platform Digital Network Limited; Zippy Capital Limited; Tripobase Limited; Bestfin Nigeria Limited; Pocketfuel Finance Limited; Lending Edge Limited; Ted Rocket Limited; Penaid Limited; Altara Credit Limited; New Credage Nigeria Limited; Lendha Technologies Limited; Doja Lemaire Global Limited; Paydayhub Online Nigeria Limited.
“Retail Booster Limited; Finnew Fintech Limited; Fezotech Nigeria Limited; Citadele Capitals Limited; Fewchore Finance Company Limited; A1 Capital Solution Limited; One Payout Limited; Linkpark Technology Nigeria Limited; Lidya Global Limited; Red Planet Nigeria Limited; Kwaba International Limited; Maywood Lending Limited; Princeps Credit System Limited; Linkpark Technology Nigeria Limited; Finpadi Technologies Limited; Better Lending Company Limited; Umba Digital Solutions Limited; Fintrade Solutions Limited and Aella Financial Solutions Limited.”
The FCCPC has however extended the deadline for the 41 DMLs to comply or risk interruption of their operation.
The FCCPC gave the loan sharks on March 27, 2023 to provide the necessary details for documentation.
FCCPC said, “Pursuant to Sections 17(a), (e), (g), (h). (1), (m), (s). (x), (y), 18(3): 123; 124: 127; 129 and 130 of the Federal Competition and Consumer Protection Act, 2018 (FCCPA).
“In furtherance of the collaboration of the Inter-Agency Joint Task Force, the Federal Competition and Consumer Protection Commission (Commission) extended the deadline for the registration of Digital Money Lenders (DMLs) to January 31, 2023. This was to ensure the registration of DMLs whose registration was still in process and to prevent significant market disruptions.
“The Commission noted, however, that several DMLs have not yet provided all relevant documentation to complete their registration process. To this end, the Commission is further extending the registration deadline to Monday, March 27, 2023.”