Why FG Bars Illegal Online Banks, Approves 173 Loan Apps
The Federal Competition and Consumer Protection Commission has approved 173 digital lending applications to operate and curb fraudulent transactions in digital lending.
Of the 173, 119 have full approvals and 54 have conditional approvals. After loan apps started harassing Nigerians, the FCCPC began a registration drive to protect citizens from the atrocities of these apps.
It released a ‘Limited Interim Regulatory/ Registration Framework and Guidelines for Digital Lending 2022’ to regulate the digital lending space and make registration and approval a prerequisite for companies seeking to operate in the space.
After shifting its deadline multiple times, it finally adopted March 27, 2023, as the close of registration. The commission has now released a list of approved apps that can operate in the country. Companies without approvals will not be able to operate in the space.
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Commenting on its effort against digital lending apps in August 2022, the FCCPC said, “In addition to the enforcement action(s) and in furtherance of the desire to promote fair, transparent and mutually beneficial alternative lending opportunities apart from traditional lending to consumers, 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.
“This becomes enforceable immediately. It requires permission to proceed in digital lending; it provides a limited moratorium period for existing businesses to comply in order to continue in digital lending.
“The guidelines also mandate different service providers in the relevant ecosystem (such as banks, access/download platforms or stores, technology providers and payment systems) to require regulatory approval before providing services.”
Some of the approved loan apps listed by the commission include Branch International Financial Services Limited, Fairmoney Micro Finance Bank, Pivo Technology Limited, Renmoney Microfinance Bank Limited, Carbon Microfinance Bank Limited, Creditwave Finance Limited amongst others.
Loans without the FCCPC’s approval will be removed from Play Store by Google and unavailable for download.
In November, Google Play announced updates to its Developer Program Policy, which mandated that digital money lenders in Nigeria, India, Indonesia, the Philippines, and Kenya must conform to regulatory rules.
This was expected to come into force from January 31, 2023. In March, Google took down hundreds of unapproved loan apps from the Play Store in Kenya according to a report on TechCrunch.
In February 2023, the Nigeria Data Protection Bureau revealed that a national committee, made up of federal agencies, was working in tandem to clip the activities of illegal loan apps in the country.
