Operators of payment systems in Nigeria, such as Flutterwave, Opay, Paystack, and Monify, and telecommunications companies in the country, including Mobile Network Operators (MNOs), have been ordered by the Federal Competition and Consumers Protection Commission (FCCPC) to cease aiding the activities of illegal digital money lenders (also known as money sharks) in the country.
This was announced yesterday in Lagos by FCCPC Executive Vice Chairman/Chief Executive Officer Babatunde Irukera during the Commission's enforcement actions against a loan shark named Soko Lending Limited. Irukera further stated that the FCCPC has obtained orders to disable or diminish the ability of violators to circumvent regulatory efforts to protect citizens.
In addition, he said that the interagency Joint Regulatory and Enforcement Task Force had prepared and endorsed a Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending.
Soko Lending, he says, "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 and one of the most prolific actors in violating consumer privacy, fair lending terms, and ethical loan repayment/recovery practices."
After recalling that the Commission had taken similar enforcement action in the past, which had helped curb exploitative activities in the industry, he noted that some of the lenders had found ways to avoid complying with orders to freeze accounts and remove access to their apps.
Irukera continued: "The Commission has also entered other Orders that will limit or decrease offenders' ability to create circumvention attempts or alternative methods to circumvent the purpose of the inquiry and protection of citizens."
"Specifically, the Commission has ordered all active payment systems, including Flutterwave, Opay, Paystack, and Monify, to immediately halt and desist providing payment or transaction services to lenders under investigation or not otherwise functioning with necessary regulatory permissions.
"FCCPC has also ordered telecommunications and 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 who are operating without regulatory approval in any other capacity.
As a first and interim step toward establishing a clear regulatory framework, "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." [Citation needed] [Citation needed] "The inter-agency Joint Regulatory and Enforcement Task Force has developed and mutually adopted a Limited Interim Regulatory/Registration Framework