The Nigerian government has continued its clampdown on illegal mobile loan apps ripping people off through fraudulent practices. This comes even as the Federal Government said there are about 70 to 90 online lending applications currently operated by various firms in Nigeria.
According to the Executive Vice Chairman, Federal Competition & Consumer Protection Commission, Babatunde Irukera, the government is in a collaborative engagement with the media to review and analyse the state of the market.
According to the Executive Vice Chairman, Federal Competition & Consumer Protection Commission, Babatunde Irukera
He said some of the online apps were legitimate while others were operating illegally.
“Not all the online loan applications are illegal. Some are completely illegitimate; some are legitimate but illegitimate in their approach to tracking debtors. We are against illegitimate works,” Irukera said.
The FCCPC boss urged companies to be responsible and responsive to customer care services.
According to him, the government is more accessible and easier to find than private individuals because individuals want to make a profit.
Irukera said, “Government for all its inefficiencies, is more accessible, easier to find than private individuals who just sell to make a profit.
“Industry must prioritise responsiveness and responsibility to their customers. Customer responsiveness is a core to business and FCCPC owes this as a responsibility.”
He said, “Challenge in telecommunication is transparency in billing. With data, it is difficult to see transparency in data billing, transparency is better with voice calls than with data.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The Nigerian government has carried out its threat of shutting down illegal online banks and loan apps operating in the country. This was through the combined efforts of The Federal Competition Consumer Protection Commission (FCCPC), in collaboration with the Independent Corrupt Practices and other Related Offences Commission (ICPC), National Information Technology Development Agency (NITDA), and the Nigerian Police Force, on Friday, raided some illegal financial institutions operating on Opebi Road, Ikeja, Lagos.
Chief Executive Officer, FCCPC, Babatunde Irukera
Among the financial institutions affected were, GoCash, Okash, EasyCredit, Kashkash, Speedy Choice, Easy Moni.
The raid, the FCCPC said, was in response to customers’ complaints of malpractices by the financial institutions. Speaking during the raid, the Chief Executive Officer, FCCPC, Babatunde Irukera, explained that customers had accused the financial institutions of violating their privacy in their debt recovery drive.
He said the agency had begun investigations into the allegations since 2020.
He said, “This information started quite a while ago. Some time ago, when the country was on lockdown in 2020 due to the pandemic, we started seeing the rise in money lenders”
“Because there was a lockdown due to the pandemic, people needed a small easy loan which is understandable. But over a period of time, people started complaining about the malpractices of the lenders, so we started tracking it.”
“Towards the end of last year, we gathered quite a lot of information. We started working with some other key agencies and the FCCPC led the meeting where we all agreed there would be a joint effort to look into these businesses.”
According to Irukera, the interest rate charged by online financial institutions appears to violate the ethics of how lending is done.
He further said, “The key two things that were subject of concern were what seems to be the naming and shaming violation of people’s privacy with respect to how these lenders recover their loans.”
Secondly, the interest rate seems to be a violation of the ethics on how lending is done. So, those were the two things that we set out to look for.”
“So, we started an investigation trying to determine the location of these firms. That has been a very difficult thing. We did that for several months and some of them have moved from one place to another and we have been visiting these places for months”
The FCCPC boss, however, said investigations had revealed that the loan firms were neither Nigerian companies nor registered in the country.
“We found out that most of these companies operate from the same place. We also found out that many of them are actually operated by the same person. They are not Nigerian companies, they don’t have an address in Nigeria and they are not registered in Nigeria with the Corporate Affairs Commission and they do not have any licence to do their business”
As a result, Irukare said the agency had written to global app companies asking them to suspend the operations of the online banks.
He said, “Essentially, what they have is an app, and so we started gathering more information about them. We engaged the public and the people who had been their victims. They gave us more information”
“As we got more information we had enough evidence to convince the court to issue a warrant for us to proceed with an investigation into a search and seizure. And sometime last month, a court issued a warrant and between then and now, we were preparing a sting operation which is what you are seeing here today. The reason for this is because we wanted to be sure we were hitting at the place where we could get many of them.”
He explained, “In addition to what you are seeing here today, the FCCPC has also issued multiple orders today. Two of them are going to vendors: Apple and Google stores where some of these apps are available. We have asked them to shut these companies’ apps down so that people will not be victimised anymore. Secondly, some of them (the orders) have gone to the bank, asking them to freeze the accounts used by these people.”
“I must add though that not all money lenders are operating illegally and that is why it has been taking time for us to track these people.
It doesn’t also mean that the people we are proceeding against today are the only ones, no. We want to start with them. We also understand that they are between five and seven companies operating at the same location.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Nigeria’s lower legislative chamber, the House of Representatives has called on cable TV operators to readjust their services so as to be able to accommodate a pay-as-you-go (PAYG) model. The House has resolved to do this based on a House Committee report on the increase of subscription fees by broadcast digital satellite providers, including market leading DSTV.
The House, in pleading with the Federal Government to implement the plan, said the plan would stimulate healthy competition in the entertainment industry. The absence of visible competitors, the House said, was tacit approval of a monopoly in the sector.
Babatunde Irukera, the CEO of Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC)
Leading operators including DStv, GoTV, and Startimes now face the possibility of being forced to reduce their prices and implement a model that may not work for Nigeria.
The Pay-As-You-Go or PAYG billing model, also called Pay-As-You-Watch, only charges subscribers when they are actively consuming television content. Unlike present subscription services, the PAYG model isn’t periodic; what you watch at any given time is what you’re charged for. With Pay-Per-View, subscribers pay to watch a specific program only, and not the whole channel or bouquet.
Last year, Babatunde Irukera, the CEO of Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC), notably questioned the viability of implementing PAYG in Nigeria, explaining that a false comparison was being made with how PAYG worked in the telecommunications sector.
“What people are asking for in pay-as-you-go is when you turn on your television and you are watching, you pay. When you turn off your television and you are not watching, you don’t pay,” Irukera said.
“It is difficult because the content has been created, what you are paying for is access. How you use the access is entirely discretionary and up to you.”
It could be recalled that last year, the CEO of Multichoice, John Ugbe, appeared before the ad-hoc committee of the House to explain why the Pay-As-You-Go (PAYG) and Pay-Per-View (PPV) models aren’t applicable in Nigeria. Adding that cable TV providers in Nigeria, as in other countries including South Africa, operate on subscription-based services where subscribers have access to a number of channels for a specific period. As Ugbe explained it, this involves a one-way system by satellite broadcasters that doesn’t enable them to view when subscribers are active, or when they’re away. The PAYG billing model, however, requires a two-way system that the South African company doesn’t have.
“It is only in instances where there is two-way communication between the device at the subscriber’s home and the headend of the pay-tv service provider, which will enable the provider to determine when a subscriber is connected or not, that a billing system could be designed to take into cognizance the subscriber’s behaviour,” Ugbe said.
StarTimes, on the other hand, implemented a flexible subscription plan where customers only pay for what they get, providing daily, weekly and monthly subscription offers to the public. While this is not a Pay-As-You-Go model, it does afford subscribers more control.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
