The Federal Competition and Consumer Protection Commission (FCCPC) has barred all financial technology companies from providing payment or transaction services to online money lenders known as ‘loan sharks’.
Some of the affected online money lending banks include GoCash, Okash, EasyCredit, Kashkash, Speedy Choice and Easy Moni.
Earlier, the Federal Government of Nigeria in a raid by its joint committee investigating rights violations and unfair practices, had shut down some illegal online money lenders, March 11, 2022.
The government disclosed that most of these online money lenders did not register their platform with the Corporate Affairs Commission (CAC) and also engaged in activities that were against the rights of Nigerian consumers.
Also, the interest rates charged by these online institutions violated the ethics of how lending is done.
They offer short-term loans to help subscribers meet urgent needs, but resort to unprofessional measures of harassment, cyberbullying, and breach of data privacy of their customers who may have defaulted in loan repayment.
These online banks charged interest rates that violate the ethics of how lending is done and were involved in naming and shaming which is a violation of people’s privacy with respect to how these lenders recover loans, among other violations.
Some of these online lenders who have been subjected to investigation devise methods to leverage technology and other financial services alternatives, to circumvent account freezing and app suspension.
Babatunde Irukera, the executive chairman of FCCPC, stated that the commission has given an order to telecommunications and technology companies to stop providing servers or connectivity to these online money lenders.
He also stated that Sokolending, a Chinese loan shark backed by Phillips Consulting is being investigated by the federal government for its role in facilitating the loan shark’s operations appears to be the most notorious digital money lender in the country.
“It covers a significant share of the digital or online lending market, and is one of the most prolific actors in violating consumer privacy, fair lending terms, and ethical loan repayment/recovery practices.
“With the operations today, the commission expects an 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.