The Federal Competition and Consumer Protection Commission (FCCPC) has removed the list of approved loan apps, also known as Digital Money Lenders (DMLs), from its website. The list, which contained names of over 180 registered loan apps in Nigeria, was taken down for a “clean-up.” The clean-up is likely in response to recent reports of some registered digital lenders defaming and harassing their customers, which goes against the purpose of their registration.
Regulating online lenders poses challenges for regulators, including the fact that these companies operate on the internet, making it difficult to have total regulatory control. The CEO of FCCPC, Mr. Babatunde Irukera, acknowledged that regulating digital lending is a global challenge faced by many countries. Some digital lenders have found ways to engage in illegal and abusive conduct outside the regulatory framework, necessitating ongoing efforts to track and hold them accountable. Regulators are still learning and adapting to the complexities of regulating internet-based businesses globally.
Highlighting some of the challenges of regulating online lenders in a recent interview with Nairametrics, the Chief Executive Officer of FCCPC, Mr. Babatunde Irukera said the fact that the companies operate on the internet makes it very difficult to have total regulatory control.
“Our concern is similar to global challenges concerning digital lending. Technology is an incredible tool and platform for expansion and shared prosperity; however, it is sadly also a potential tool for exploiting and impoverishing people. We are now certain that those who are willing to do business ethically have come within the Framework, while those determined to engage in illegal and abusive conduct find other means.
“Although the potential for their businesses and patronage is severely diminished by the regulatory and enforcement framework, the internet still makes it possible for them to engage in business anyway. We are also discovering that some within the Framework are creating alternative channels outside of the Framework to do business. As we find those, we permanently, without opportunity for renewal or return remove them from the list allowed to operate.
“The painstaking work of tracking businesses on the internet and holding them accountable is a global phenomenon and challenge that regulators and law enforcers are struggling with internationally. Nigeria is not excluded. Indeed, many, even more, developed countries and platforms including Google are borrowing from some of the efforts that have so far worked in Nigeria,” Irukera said.
He added that the experience shared by regulators from other countries shows that all regulators are facing similar challenges and are still undergoing some learnings in regulating internet-based businesses.
