The Federal Government has revealed plans to implement a comprehensive regulatory framework for digital money lenders (DMLs), commonly known as loan apps, in a bid to address the growing issue of Nigerians’ indebtedness to these platforms. Mr Babatunde Irukera, the Chief Executive Officer of the Federal Competition and Consumer Protection Commission (FCCPC), shared this information during an interview with TVC on Monday.
Irukera acknowledged that a significant challenge in the sector is the misuse of loan recovery methods by DMLs, leading to increased levels of loan default. He emphasized the need to adopt more ethical and appropriate loan recovery mechanisms, highlighting that the current trend of harassment and defamatory messages from loan apps is unacceptable.
“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. I’m insistent that you cannot say to me that the only language Nigerians understand is to abuse them. No, I disagree,” said Irukera.
The CEO mentioned that the interim framework implemented by the Commission has already resulted in an 80% reduction in harassment and defamatory messages from loan apps. He stressed the importance of finding a balanced approach to loan recovery to ensure that digital money lenders remain operational while protecting consumers from abusive practices.
“Some of the regulations that will come out in 2024 will be a broader approach to responsible borrowing and lending by individuals and corporations,” he added.
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The FCCPC has approved 211 digital money lenders, and the upcoming regulations are expected to provide a more comprehensive framework for responsible borrowing and lending practices in the digital lending sector.