Nigeria’s Federal Competition and Consumers Protection Commission, FCCPC, has ordered payment systems operators, PSOs, like Flutterwave, Opay, Paystack and Monify, telecommunication companies and Mobile Network Operators (MNOs) to stop offering support which enables the operations of illegal digital money lenders (loan sharks) in Nigeria.
The Executive Vice Chairman/Chief Executive Officer of FCCPC, Babatunde Irukera, disclosed this recently in Lagos when the Commission carried out enforcement actions against a loan shark called Soko Lending Limited. He added that FCCPC has gotten approvals to disable or diminish violators’ ability to circumvent regulatory efforts to safeguard citizens.
Also, he announced that the inter-agency Joint Regulatory and Enforcement Task Force Limited has been developed and adopted by Interim Regulatory/Registration Framework and Guidelines for Digital Lending as an interim step to establishing a clear regulatory framework for the sector.
He said: “Soko Lending appears to be the most consequential digital money lender with multiple apps and brand names covering a significant share of the digital/online lending market, and one of the most prolific actors in violating consumer privacy, fair lending terms and ethical loan repayment/recovery practices.”
He made it known that the Commission had previously carried out a similar enforcement action which decreased exploitative practices in the industry and noted that some of the lenders have come up with methods to circumvent account freezing and app suspension orders.
He said: “The Commission has also entered further Orders that will disable or diminish violators’ ability to devise circumvention efforts or alternative mechanisms to circumvent the objective of the investigation and protection of citizens.
“Particularly, the Commission has ordered all operating payment systems including Flutterwave, Opay, Paystack and Monify to immediately cease and desist providing payment or transaction services to lenders under investigation or not otherwise operating with applicable regulatory approvals.
“FCCPC has also ordered telecommunication/ technology companies (including Mobile Network Operators (MNOs)) to cease and desist providing server/hosting, or other key services such as connectivity to disclosed or known lenders who are targets/subjects of investigation or otherwise operating without regulatory approval.
“The inter-agency Joint Regulatory and Enforcement Task Force has developed and mutually adopted a Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022 as the first and interim step to establishing a clear regulatory framework.’’
