Expert backs commission’s move to sanitise digital lending space

Money Lenders Association, has commended the continuous actions by the Federal Competition and Consumer Protection Commission (FCCPC) to sanitise the digital lending space in Nigeria, saying it is a welcome development. Chairman of the Association, Mr Gbemi Adelekan, in an interview with the News Agency of Nigeria (NAN) on Thursday, said efforts of the FCCPC resulted in growth of online lending applications. Adelekan, also the Managing Director of Trafalgar (Kwikpay Credit), said that the use of online lending applications, when compared to traditional financial institutions, had witnessed significant growth in the past few months. He, however, noted that this growth also led to increase in default rate due to the economic situation and financial constraint for some customers. He furthered stated that the growth in the industry had also attracted licensed players and some unregistered operators that were violating the consumer rights in the country. Adelekan recalled that in August, 2022, the FCCPC issu ed interim guidelines on the registration of digital lending platforms in the country. These guidelines, he stated, were necessary to curb these unlawful practices in the eco system and help to sanitise the industry. According to him, the FCCPC has made significant progress in monitoring this important sector as the commission continues to investigate and track most of these illegally operating DMLs. '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. 'Most of these unscrupulous lenders are unregistered and without the required licenses, thereby contravening various regulations and guidelines introduced by FCCPC and the various regulatory bodies of the government. 'These illegal operators use threatening and arm-twisting tactics as part of their collection strategy,' he said. Adelekan stated that the continuous investigation and surveillanc e by the commission demonstrate its commitment to tackling these unwholesome practices head on. He said that as of today, over 230 digital money lenders have been registered by FCCPC with 88 existing loan operators put on watch list. He noted that the commission had also delisted 47 Loan apps from operating online on the google play store and also blocked the bank accounts of lenders violating the contraventions. Adelekan charged the general public to desist from patronising illegal loan apps, saying any loan application that has approved and disbursed funds to you without the necessary verification was a red flag. 'The association advises the general public to exercise caution when applying for loans online, to only select licensed and approved Digital Money Lenders (DML) on the FCCPC's website. 'This will help to reduce the rate at which these illegal loan apps name, shame and contravene the rights of consumers,' he said. Source: News Agency of Nigeria