FG orders telcos, others to block access to online loan sharks

Written by on August 19, 2022

The federal government has barred all mobile network operators, telecoms service providers and digital payment systems providers in Nigeria from rendering services to unregistered online lenders in Nigeria.


According to THISDAY, the restrictive order was announced yesterday by the Executive Vice Chairman/Chief Executive Officer of the Federal Competition and Consumer Protection Commission (FCCPC) Mr.  Babatunde Irukera, in a statement titled, “Further and Continuing Investigation of Rights Violation in Money Lending Industry and Release of Interim Regulatory Framework,” which he released immediately after the enforcement of Federal High Court order against Soko Lending limited, an alleged illegal online lender in Ikeja, Lagos State.

Irukera said: “The FCCPC has ordered all operating payment systems including Flutterwave, Opay, Paystack and Monify to immediately cease and desist from providing payment or transaction services to lenders under investigation or not otherwise operating with applicable regulatory approvals.
“The commission has also ordered telecommunication/technology companies (including Mobile Network Operators (MNOs)) to cease and desist providing server/hosting, or other key services such as connectivity to disclosed or known lenders who are targets/subjects of investigation or otherwise operating without regulatory approval.”


He stated further that, “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 (now available at https://fccpc.gov.ng/resources-library/regulations/ ) as the first and interim step to establishing a clear regulatory framework,” for online lending activities in the country.

He explained that this regulatory framework on digital lending has, “become enforceable immediately,” adding that henceforth “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.”
The FCCPC expressed its gratitude to victims and citizens who have either provided information or contributed to the investigation of the activities of illegal digital lenders.

It also “welcomes the continuing engagement that provides the relevant information or intelligence through the already established and publicised channels.”
Irukera also said in furtherance of a continuing investigation and pursuant to additional intelligence, the FCCPC yesterday conducted enforcement actions with respect to some digital money lenders in Lagos State.


He said: “Specifically, intelligence gathered including over a significant period of surveillance as well as renewed orders of the Federal High Court empowering the commission to search and seize properties from premises of targets/subjects of investigation, the commission enforced against a company widely known as Soko Lending Limited.


“The information available to the commission demonstrates that Soko Lending appears to be the most consequential digital money lender with multiple apps and brand names covering a significant share of the digital/online lending market, and one of the most prolific actors in violating consumer privacy, fair lending terms and ethical loan repayment/recovery practices.


“Prior to this operation, the commission had previously, on March 11, 2022 carried out a similar enforcement action with respect to multiple lenders; which action and continuing investigation has reduced previously high and escalating unethical, obnoxious and unscrupulously exploitative practices in the industry.”
He, however, noted that some of the lenders who have been subject of investigation have devised methods to leverage on technology and other financial services alternatives to circumvent account freezing and app suspension orders.


But, “with the operations today, the commission expects appreciable additional reduction in these unacceptable practices.
“The commission has also today entered further Orders that will disable or diminish violators’ ability to devise circumvention efforts or alternative mechanisms to circumvent the objective of the investigation and protection of citizens,” Irukera said.

(ThisDay Live)


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