Agencies collaborate to tackle loan apps challenges

The Nigeria Data Protection Bureau has stated that a national committee, made up of federal agencies, was working to curb the activities of illegal loan apps in the country.

According to the National Commissioner/Chief Executive Officer of the bureau, Dr Vincent Olatunji, these firms had caused a lot of pain to Nigerians.

He stated that one agency cannot do the work alone, hence the collaboration among agencies.

He stated this during a recent press briefing in Lagos.

He said, “One good thing that is happening is that it is not limited to the bureau alone. There are so many government organisations involved now.

“We have a national committee working on this. We have the Federal Competition and Consumer Protection Commission for consumer protection. We have the National Information Technology Development Agency, which is about the technology they are using to access the contacts of their customers.

“We have the Nigerian Communications Commission, which is about the platform. We have the Independent Corrupt Practices Commission and the Economic and Financial Crimes Commission for financial crimes. We have the police, which is about investigating crimes. We have the Central Bank of Nigeria which is ideally the body regulating the financial sector.”

Olatunji noted that many of the loan apps have licenses issued by the various states where they operate and do not have steady offices to hide their identity.

He said, “One common thing with them is that they do not have physical offices. When they are here today, they move to another one tomorrow, and repeat the cycle because they are hiding their identity.”

He further stated that the bureau was in the process of creating a collaborative guideline that would regulate and sanitise the sector.

He explained that while the bureau got reports of the activities of many of these apps, it was difficult to investigate because the firms do not have offices.

Olatunji added, “We are really coming out to ensure that we track them down and save a lot of Nigerians from these organisations.

“But one thing that we need to also note as part of the awareness is the fact that some of these activities are written in their privacy policies, but a lot of people do not read them because they want access to quick money. Some even state that when one defaults, they would get access to their contacts.

“A lot of people in this category are illiterates and what is important to them is the money, but we are working on it with all the organisations coming together. We are addressing it.”

Loan apps have grown in prominence in the country because of how tough it is to get a bank loan. Many Nigerians have had to turn to these apps to quickly access credit. But with high-interest rates and short turnover periods, many borrowers have defaulted, and these apps are famed for their crude means, including sending messages to the borrower’s phone contacts and defaming their borrowers, of recovering their loans.

In 2022, the FCCPC stated that was set to introduce a regulatory framework for money-lending apps in the country.

Also in 2022, Google released a new policy guideline that required all loan apps on Play Store to present licensing documents for the market they operate in.

In 2023, the FCCPC approved the operations of 94 companies as digital money lenders. It gave 49 full approvals and 45 got conditional approvals.

NP/Dominica Nwabufo