The Federal Competition and Consumer Protection Commission (FCCPC) has said it would be developing a new regulatory framework to address Nigerians’ rising indebtedness to digital money lenders (DMLs), known as loan apps....CONTINUE READING
The Chief Executive Officer of the Commission, Mr. Babatunde Irukera, disclosed this on Monday while featuring on a TVC live program. Irukera noted that indebtedness to the DMLs has become a big industry issue.
According to him, while the Commission has succeeded in reducing abuse and harassment by the loan apps, Nigerians taking loans from the platforms have continued to default. Irukera said the rising debt could lead to the collapse of the digital lenders that are also playing critical roles in the economy.
The big issue
While noting that the reduction in the use of harassment and defamation of lenders by the loan apps has led to an increase in defaulting by the borrowers, Irukera said:
“One of the big issues thatwe’re seeing is that there’s now asignificant level of loan defaultbecause people are not able to use these unethical and inappropriate loan recovery mechanisms and I’m insistentthat you cannot say to me that the onlylanguage Nigerians understand is toabuse them.No, I disagree.
“We mustnecessarily do the work no matter howhard it is to find a more sensible wayto recover loans because I also agreethat if these digital money lenders areunable to recover their loans and dropout of the market, it’s a consumerprotection problem because of those whoneed those types of short-termunsecured lending.
“So, we have to findthe balance and so some of theregulations that will come outin 2024will be abroader approach to responsibleborrowingandresponsible lendingbyindividuals and corporates.
I’m hopeful that thefuture of what we’re building is thateven school landlords would be able toreport to a centralized credit systemabout the conduct of tenants, students, andparents so that we can know eachperson’s level of fiscal responsibilityor credit wordiness.”
The FCCPC boss added that once there is a systemic approach that prevents people from access to credit on account of their responsibility or otherwise, there would be self-regulation of people and then loan recovery. He said the Commission had found out that most people defaulting are the same taking loans from several other apps…CONTINUE READING>>
