FG Disallows Online Loan Companies Access To Mobile Payment Telecoms Networks
The Federal Competition and Consumers Protection Commission, or FCCPC, has ordered payment system operators, or PSOs, such as Flutterwave, Opay, Paystack, and Monify, as well as telecommunications companies, such as Mobile Network Operators, or MNOs, in Nigeria to stop assisting the activities of illegal digital money lenders, also known as money sharks, in that nation.
Executive Vice Chairman/Chief Executive Officer of the FCCPC, Babatunde Irukera, made this known when the Commission took enforcement steps against a loan shark by the name of Soko Lending Limited yesterday in Lagos. He added that the FCCPC has been given orders to stop or lessen violators’ capacity to get around laws designed to safeguard citizens.
He also disclosed that the inter-agency Joint Regulatory and Enforcement Task Force had created and adopted a Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending as a first step in creating a precise regulatory framework for the industry.
In his own words, “Soko Lending appears to be the most significant digital money lender with multiple apps and brand names covering a significant share of the digital/online lending market. It is also one of the most prolific actors in violating consumer privacy, fair lending terms, and ethical loan repayment/recovery practices.”
He remembered that the Commission had previously taken similar enforcement action that decreased exploitative behavior in the sector, but he also noted that certain lenders had developed strategies to get around the directives to freeze accounts and suspend apps.
Irukera went on to say: “The Commission has also entered further Orders that will hinder or lessen violators’ capacity to develop methods of evading the investigation’s goal and systems for defending individuals.
“In particular, the Commission has directed all active payment systems, including Flutterwave, Opay, Paystack, and Monify, to immediately cease and desist offering payment or transaction services to lenders under investigation or not otherwise carrying out their business in accordance with the necessary regulatory approvals.
The FCCPC has also directed telecommunications and technology firms (including Mobile Network Operators (MNOs)) to stop provide server/hosting and other crucial services like connectivity to targets or known lenders who are under investigation or are otherwise acting illegally.
“As the first and intermediate step to developing a clear regulatory framework, the inter-agency Joint Regulatory and Enforcement Task Force has prepared and unanimously agreed a Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022.”