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The Federal Competition and Consumer Protection Commission (FCCPC) said it would be creating a new regulatory framework to address the mounting debts faced by digital money lenders (DMLs) and other challenges that could erode confidence in the subsector and ultimately lead to its extinction.
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The Commission’s Chief Executive Officer, Mr. Babatunde Irukera, spoke recently on a TVC live program.
He expressed worries that Nigerians who borrowed from DMLs, also called loan apps, are increasingly defaulting in a way that could undermine the sustainability of the operators.
He said while the FCCPC has reduced cases of harassment of borrowers by lending apps, Nigerians, who have borrowed from the DMLs, have continued to default in their payment obligation. .
His words: “One of the major issues we’re seeing is that there is now a significant level of loan default because people are unable to use these unethical and inappropriate loan recovery mechanisms, and you cannot tell me that the only language Nigerians understand is to abuse them. No, I don’t think so.
“We must do the work, no matter how difficult it is to find a more sensible way to recover loans because I agree that if these digital money lenders are unable to recover their loans and exit the market, it is a consumer protection issue because of those who need those types of short-term unsecured lending.”
“We must strike a balance, and some of the regulations that will be implemented in 2024 will take a broader approach to responsible borrowing and lending by individuals and corporations.”
About 211 DMLs have been have been registered by the FCCPC as at December 2023.
