FG to Commence New Regulation for Loan Apps in 2024

Federal government has announced that it will implement a new regulatory framework for digital money lenders (DMLs), known as loan apps.

Mr Babatunde Irukera, chief executive officer of the Federal Competition and Consumer Protection Commission (FCCPC), who disclosed this in an interview with TVC on Monday, said the new regulations would address Nigerians’ rising indebtedness to DMLs.

Irukera noted that the sector’s big problem is that DMLs resort to abuse on loan recovery.

He added that implementing the Commission’s interim framework has led to an 80 per cent reduction in harassment and defamatory messages from loan apps.

“One of the big issues that we’re seeing is that there’s now a significant level of loan default because people are not able to use these unethical and inappropriate loan recovery mechanisms, and I’m insistent that you cannot say to me that the only language Nigerians understand is to abuse them. No, I disagree.

“We must necessarily do the work no matter how hard it is to find a more sensible way to recover loans because I also agree that if these digital money lenders are unable to recover their loans and drop out of the market, it’s a consumer protection problem because of those who need those types of short-term unsecured lending.

“So, we have to find the balance, and some of the regulations that will come out in 2024 will be a broader approach to responsible borrowing and lending by individuals and corporations”, he said.

According to the Commission, it has approved 211 digital money lenders.