“Find Balance”: FCCPC to Develop New Policy to Force Debtors to Refund Loan Apps

“Find Balance”: FCCPC to Develop New Policy to Force Debtors to Refund Loan Apps

  • Federal Competition and Consumer Protection Commission said it is looking to work on a new framework to protect loan apps
  • It noted that consumers have taken to defaulting in payment after borrowing, knowing that the apps would not resort to harassment
  • The Commission revealed that defaulters are the same set of people who collect loans from multiple other apps

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

The Federal Competition and Consumer Protection Commission (FCCPC) has revealed its intention to develop a new regulatory framework.

FCCPC to Develop New Regulation to Force Debtors to Refund Loan Apps
FCCPC said that the business is facing severe problems due to the DML debt. Photo Credit: Courtneyk, Stockyimages
Source: Getty Images

According to the Commission, this move would help address Nigerians’ rising indebtedness to digital money lenders (DMLs), also known as loan apps.

Babatunde Irukera, the Chief Executive Officer of FCCPC, disclosed this during a live television program on Monday, December 25, as reported by The Guardian.

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Harassment declined, but debt increased

Even though the Commission has been able to cut down on harassment and abuse by the lending apps by 80%, it stated that default rates for borrowers using the platforms have not decreased.

Irukera claims that the business is facing severe problems due to the DML debt, which could lead to the demise of digital lenders that are also vital to the economy.

He pleaded with the lenders to stay in the market by coming up with a more reasonable method of loan recovery.

He added:

“So, we have to find the balance and so some of the regulations that will come out in 2024 will be a broader approach to responsible borrowing and responsible lending by individuals and corporate entities.
"I’m hopeful that the future of what we’re building is that even school landlords would be able to report to a centralized credit system about the conduct of tenants, students, and parents so that we can know each person’s level of fiscal responsibility or credit wordiness.”

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He added that the Commission found that most defaulters were the same people who obtained loans from several different applications.

The head of the FCCPC stated that loan recovery would be effective when a systemic approach is implemented that forbids people who are not credit-worthy from obtaining credit because of their record.

He added that if there was a single location where authorized lenders could obtain data on people and their creditworthiness, the problem could be solved.

He stated that this policy will be made public by 2024 the following year.

Full list of FCCPC, CBN-approved loan app companies and their apps

Legit.ng reported that the Federal Competition and Consumer Protection Commission (FCCPC) has issued a new list of 154 companies granted full approval to operate loan apps in Nigeria.

Earlier, the FCCPC delisted the approved companies for ‘clean up.’ After adding apps each firm owns under its approval list, the newly released list is more detailed.

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The list of the apps associated with the firms will let the customer identify the companies behind the apps they use and also reduce incidents of app duplicity by the companies.

Source: Legit.ng

Zainab Iwayemi avatar

Zainab Iwayemi (Business Editor) Zainab Iwayemi is a business journalist with over 5 years experience reporting activities in the stock market, tech, insurance, banking, and oil and gas sectors. She holds a Bachelor of Science (B.sc) degree in Sociology from the University of Ilorin, Kwara State. Before Legit.ng, she worked as a financial analyst at Nairametrics where she was rewarded for outstanding performance. She can be reached via zainab.iwayemi@corp.legit.ng

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