According to a recent document signed by the Chief Executive Officer of the Federal Competition and Consumer Protection Commission (FCCPC), Mr Babatunde Irukera, on behalf of the Joint Regulatory and Enforcement Committee in Abuja, the Federal Government has begun investigations into loan companies as many have been reported in the past for illegal activities.
Loan companies are very popular in Nigeria for quite a handful of reasons. They mostly operate online, give instant loans without requiring collateral like commercial banks. All users (both individuals and small businesses) need to do is to register and get their loans paid into their account without having to visit any physical location or provide collateral. But as great as these sounds, these loan companies are proving to be nothing but Curate’s egg. There have been many complaints about how they operate by individuals and small businesses that have used their service.
The signed statement showed that a consortium of the Federal Competition and Consumer Protection Commission (FCCPC), the Central Bank of Nigeria (CBN), the Independent Corrupt Practices Commission (ICPC), the National Information Technology Development Agency (NITDA) and the Economic Financial Crimes Commission (EFCC), has started investigations into these loan competitions for allegations of violating the rights of their users.
“The Federal Competition and Consumer Protection Commission on November 10, 2021, hosted a meeting attended by the Chief Executive Officer of the Independent Corrupt Practices Commission (ICPC) and representatives of the National Information Technology Development Agency (NITDA) and the Central Bank of Nigeria (CBN); in leading effort to address the multiple potentially dubious conduct of certain money lenders, otherwise known as loan sharks”, the document showed and according to the FCCPC chief, the committee would be in charge of addressing the practices of these loan companies.
In an older article we published in August, we explained how these loan companies have deviated from their original path of providing access to loans and narrowing the financial inclusion gap to taking on the tyrannical positions of loan sharks. These companies are guilty of violating some privacy rights of individuals and go as far as texting (via SMS and WhatsApp) the contacts of their defaulters informing them of the loan while also adding outrageous late payment fees.
The Federal Government has not been quiet about these loan companies. In August the National Information Technology Development Agency (NITDA) fined Soko Loan Company, a company notorious for violating the rights of its users, the sum of N10 million naira. The fine came after a series of warnings and directives that the company refused to follow. The National Information Technology Development Agency (NITDA) accused Soko Loan Company Limited of invasion of privacy and illegally tampering with users’ private data. According to NITDA, the company was guilty of “unauthorized disclosure, failure to protect customers’ personal data and defamation of character and to carry out due diligence as prescribed by the Nigeria Data Protection Regulation (NDP)”.
Although previous efforts by the government to put these loan companies in their place seemed to have not been completely effective, new efforts may prove to be very useful. At the end of the meeting, the FCCPC chief mentioned that the commission has created a dedicated segment to deal with complaints related to loan companies. The email address to forward complaints, according to him, is firstname.lastname@example.org. This email account will receive complaints, from which the agency will deal with them as swiftly as possible.