A combined committee of the Federal Competition and Consumer Protection Commission (FCCPC), the Central Bank of Nigeria (CBN), and the Economic and Financial Crimes Commission (EFCC) will shortly shut down illegal money lending enterprises.
“The joint committee is meeting and agreeing on how to proceed but I can say that two of the entities of the joint committee will be going on the field and doing enforcement work now, very shortly. They will be closing down businesses and engaging App stores to shut down certain applications that are infringing and abusive. We are also going to be writing interim regulations and some basic information for all these money lenders to provide information so that people will know who they are. Some of them are just Apps that we do not even know who the promoters are. So we are going to provide certain frameworks for them to comply with before doing business,” an official statement from Mr Babatunde Irukera, the Chief Executive of Federal Competition and Consumer Protection Commission (FCCPC) read.
The National Information Technology Development Agency (NITDA) and the National Human Rights Commission (NHRC) are also members of the group.
Nigeria Joins Kenya To Target Lending Firms
The latest move by the combined committee will not be its first. Recently, the much awaited 2021 Central Bank of Kenya (Amendment) Bill was signed into law in Kenya.
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The new law now requires digital lenders to submit key documents when applying for CBK licensing, including a certificate of incorporation under the Companies Act, memorandum and articles of association, and a statement of compliance with the Consumer Protection Act’s provisions.
From the date the CBK publishes the necessary regulations, players in the digital lending market will have six months to apply for licence.
By signing the new law, the CBK has now been given the authority to proverbially bell the cat, with the banking sector regulator looking to bring order to an industry that has been accused of a variety of wrongdoings, including charging borrowers exorbitant interest rates and using crude and deceptive debt collection tactics.
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CBK Governor Patrick Njoroge has remained outspoken about the alleged wrongdoings, claiming that the digital lenders are a burden on not only Kenyans but also the economy.
The CBK will be able to set limitations for interest rates charged by digital lenders, and the reserve bank will have the authority to cancel licenses from players that violate the Data Protection or Consumer Protection Act’s criteria.
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Meanwhile, after being kicked out of the credit information sharing (CIS) system last year by CBK, licensed digital lenders will now be able to list creditors with Credit Reference Bureaus (CRBs), thanks to the new law.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer