Nigeria Bars Illegal Online Banking and Approves 173 Digital Lending Apps
The Nigerian government has taken steps to protect its citizens from the unsavoury practices of loan apps by approving 173 digital lending applications to operate in the country.
In a statement issued on April 4, 2023, the Federal Competition and Consumer Protection Commission (FCCPC) barred illegal online banking and released a regulatory framework and guidelines for digital lending to regulate the digital lending space.
Conditional Approvals and Registration Deadlines
Out of the 173 approved digital lending apps, 119 have full approvals, while the other 54 have conditional approvals.
The FCCPC launched a registration drive to ensure that loan apps operating in the country comply with regulatory requirements.
The commission set a deadline of March 27, 2023, for registration, which it shifted multiple times.
Enforcement and Regulatory Framework
The FCCPC is committed to promoting fair, transparent, and mutually beneficial alternative lending opportunities to consumers.
The inter-agency Joint Regulatory and Enforcement Task Force developed a Limited Interim Regulatory/ Registration Framework and Guidelines for Digital Lending, 2022, as the first and interim step to establishing a clear regulatory framework.
Companies without approvals will not be able to operate in the digital lending space.
In an effort to regulate the digital lending space and protect consumers from unsavory practices, the Federal Competition and Consumer Protection Commission (FCCPC) in Nigeria has approved 173 digital lending applications to operate in the country.
FCCPC Releases List of Approved Lending Apps in Nigeria. The FCCPC has approved a number of lending apps to operate in Nigeria, including Branch International Financial Services Limited, Fairmoney Micro Finance Bank, Pivo Technology Limited, Renmoney Microfinance Bank Limited, Carbon Microfinance Bank Limited, Creditwave Finance Limited, and others.
Google Play Policy Updates and Enforcement
To ensure compliance with regulatory rules, Google Play announced updates to its Developer Program Policy in November 2022. This mandate required digital money lenders in Nigeria, India, Indonesia, the Philippines, and Kenya to conform to regulatory rules and was expected to come into force from January 31, 2023. Google removed hundreds of unapproved loan apps from the Play Store in Kenya in March 2023.
Loans App without the FCCPC’s approval in Nigeria will also be removed from the Play Store by Google and will not be available for download.
National Committee Against Illegal Loan Apps
The Nigeria Data Protection Bureau revealed in February 2023 that a national committee, consisting of federal agencies, was established to prevent the proliferation of unregistered and illegal loan apps that exploit vulnerable consumers.
The committee is working to clamp down on the activities of illegal loan apps and ensure that consumers have access to fair and transparent alternative lending opportunities apart from traditional lending.
The FCCPC’s enforcement of regulations and the national committee’s efforts are aimed at protecting consumers from the unsavory practices of loan apps and creating a clear regulatory framework for the digital lending industry in Nigeria.