In a bid to tackle fraud in the Nigerian Fintech industry, the Federal Competition and Consumer Protection Commission (FCCPC), has removed another batch of unregistered loan apps from the Google Play store. 47 apps were removed at the end of May 2024.
According to the commission, this is coming after it was discovered that despite deleting illegal apps consistently, the proliferation of unregistered loan apps continues, with many operating through Android Package Kit (APK) files, and circumventing official app store regulations.
The FCCPC stated that the number of registered loan apps in Nigeria has risen to 284, comprising 232 companies with full approval and 11 others licensed by the Central Bank of Nigeria (CBN).
It also noted that it has placed 88 others on a watchlist amid a surge in the number of unregistered and potentially predatory loan apps, which have been causing considerable distress among Nigerians.
Despite these advancements, the ongoing challenges posed by unregistered apps continue to impact Nigerian borrowers adversely.
Commenting on the increased number of unregistered apps, the Chief Executive Officer of FCCPC, Dr. Adams Abdullahi, said infractions have been on the rise as more Nigerians are now taking loans from the various loan apps.
Abdullahi said the commission would now involve law enforcement agents in tackling the menace in addition to regulatory prohibition and consequences.
He noted that this is in line with the FCCPC’s Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, established in 2022, which is aimed at promoting ethical lending practices and protecting consumer rights.
The situation, according to financial analysts, underscores the need for stronger regulatory frameworks and consumer protection measures in Nigeria’s digital finance sector.
According to the analysts, the gloomy state of the Nigerian economy has led to the rise of loans taken by its citizens.
Commenting on this, the Managing Director of APT Securities Limited, Kurfi Garba, said, “The number of loans is no surprise to me and that is due to inflation, most especially food inflation. Some households do not earn much and to meet up with responsibilities, since they cannot borrow money from the banks, they go to these loan apps.
“These loan apps knowing fully well their desperation, promise to help them and give them the loans. This is another reason banks are having bad plans. That is another story for another day but as the agency has recognized that there are unregistered apps, there is a need to keep tracking these apps before they destroy this economy.”
Also speaking on the development, the Chairman of the Money Lenders Association, Gbemi Adelekan, highlighted that these unregistered apps operate without regulatory compliance, exposing borrowers to severe risks and unethical treatment.
“While most licensed Digital Money Lenders (DML) are operating their loan app business ethically, in compliance with the prevailing laws of the land and lending principles, we also have a few bad eggs in the industry with illegal lending practices and unethical recovery processes.
Most of these unscrupulous lenders are unregistered and without the required licenses, thereby contravening various regulations and guidelines introduced by FCCPC and the different regulatory bodies of the Government. These illegal operators use threatening and arm-twisting tactics as part of their collection strategy,” he added.