The Federal Competition and Consumer Protection Commission (FCCPC), said the implementation of its interim framework has led to about 80% reduction in harassment and defamatory messages from loan apps.
The executive Director of FCCPC, Irukera, noted that though the Commission was not satisfied with its achievements, efforts are ongoing to address the remaining 20%. He added that the limited and interim regulatory framework for the loan apps is still evolving because fintech is new and emerging across the world.
Mr. Babatunde Irukera, who disclosed this on Monday while featuring on a TVC live program. Irukera noted that indebtedness to the DMLs has become a big industry issue.
According to him, digital money lending is plugging an important gap in society, hence, developing the best regulatory ecosystem also requires learning how the industry operates. Under the interim regulatory framework, the FCCPC has registered over 200 loan apps as it seeks to sanitize the digital lending market to end unethical practices of defaming and harassing borrowers. As of the last count, a total of 211 digital lenders have been approved by the Commission.
The chairman pointed out that the reduction in the use of harassment and defamation of lenders by the loan apps has led to an increase in defaulting by the borrowers. Irukera said: “One of the big issues that we’re seeing is that there’s now a significant level of loan default because people are not able to use these unethical and inappropriate loan recovery mechanisms and I’m insistent that you cannot say to me that the only language Nigerians understand is to abuse them. No, I disagree. We must necessarily do the work no matter how hard it is to find a more sensible way to recover loans because I also agree that if these digital money lenders are unable to recover their loans and drop out of the market, it’s a consumer protection problem because of those who need those types of short-term unsecured lending.”
The FCCPC boss added that once there is a systemic approach that prevents people from access to credit on account of their responsibility or otherwise, there would be self-regulation of people and then loan recovery. He said the Commission had found out that most people defaulting are the same taking loans from several other apps.
