Payment system operators, or PSOs, like Flutterwave, Opay, Paystack, and Monify, as well as telecommunications firms; like Mobile Network Operators in Nigeria, have been ordered by the Federal Competition and Consumers Protection Commission (FCCPC); to stop supporting the activities of illegal digital money lenders, also known as money sharks in Nigeria.
Babatunde Irukera, Executive Vice Chairman/Chief Executive Officer of the FCCPC, said this on Thursday, August 18, 2022.
He spoke in Lagos when the Commission took enforcement action identified as Soko Lending Limited. Also, he said that the FCCPC had obtained orders to disable or lessen violators’ ability to evade regulatory efforts to protect residents.
The FCCPC Chairman also disclosed that the inter-agency Joint Regulatory and Enforcement Task Force had created and adopted a Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending as a first step in creating a precise regulatory framework for the industry.
“Soko Lending appears to be the most consequential digital money lender with multiple apps and brand names; covering a significant share of the digital/online lending market…One of the most prolific actors in violating consumer privacy, fair lending terms, and ethical loan repayment/recovery practices,” Irukera noted.
He recalled that the Commission had previously carried out a similar enforcement action; adding that this reduced exploitative practices in the industry. However, he admitted that some of the lenders have devised methods to circumvent account freezing and app suspension orders.
Irukera further stated: “The Commission has also 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.
“Particularly, the Commission has ordered all operating payment systems; including Flutterwave, Opay, Paystack and Monify to immediately cease and desist providing payment or transaction services to lenders under investigation; or not otherwise operating with applicable regulatory approvals.
“FCCPC has also ordered telecommunication/technology companies (including Mobile Network Operators (MNOs)) to cease and desist providing server/hosting; or other key services such as connectivity to disclosed or known lenders who are targets/subjects of investigation or otherwise operating without regulatory approval.
“The inter-agency Joint Regulatory and Enforcement Task Force has developed and mutually adopted a Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022 as the first and interim step to establishing a clear regulatory framework.’’