FG warns Fintechs to stop payment services to loan apps

This position was revealed on Thursday, August 18, 2022 by the Executive Vice Chairman, Federal Competition & Consumer Protection Commission, Babatunde Irukera while on an enforcement assignment on some premises used by illegal online money lending apps in Lagos.

Irukera noted that as part of the modalities to enforce the decision of the FG, the the commission had mapped out an interim framework that would stop the registration of lending apps on Google Playstore unless the app is duly registered.

Irukera said, “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.

According to a report the commission made in April, Nigeria currently has about 70 to 90 online lending applications currently operated by various firms.

Irukera had, however, noted that some of the online apps were legitimate while others were operating illegally.

Apart from the order given to Fintechs, the commission had also ordered telecommunication companies to desist from providing server services to lenders who are subjects of investigation.

This enforcement is targeted at known lenders who are targets and subjects of investigation as they have been indicted for operating with very fraudulent practices and without regulatory approval.

The commission also identified a particular lending app, Soko Lending as one of the most prolific actors in violating customer privacy, with very exorbitant interest rates and lending terms and also, with an unethical loan repayment recovery practice.