Nigerian government cracks down on 6 illegal digital lenders
On Friday, three Nigerian federal government agencies—the Federal Competition and Consumer Protection Commission (FCCPC), the National Information and Technology Development Agency (NITDA), and the Independent Corrupt Practices and Related Offences Commission (ICPC)—worked together with the Nigerian police force to raid some illegal financial institutions based on Opebi Road in Ikeja, Lagos, Nigeria.
Digital lending platforms such as GoCash, Okash, EasyCredit, Easi Moni, KashKash, and Speedy Choice were among the companies that failed, according to Punch.
The FCCPC, which led the joint operation, stated that the raid was in response to several customer complaints about financial institutions’ malpractices.
Speaking at the raid, FCCPC CEO Babatunde Irukera stated that the agency began investigating and monitoring these companies in 2020 after consumers began accusing them of mishandling and violating their private data during the loan recovery process.
“This information has been circulating for quite some time. “We started seeing the rise of money lenders when the country was on lockdown in 2020 due to the pandemic,” Irukera said. “Because of the lockdown, people needed small and quick loans to stay afloat, which is understandable.” But, over time, people began to complain about the lenders’ malpractice, so we began to track it.”
Irukera also stated that, by the end of last year, the agency had gathered a large amount of data and had begun working with other key agencies to monitor these businesses.
According to Irukera, their preliminary findings are as follows: the interest rates charged by these digital lenders appear to violate the ethics of lending; second, the unethical loan recovery practice of violating customers’ privacy in order to abuse and shame them and their acquaintances.
“As a result, we began an investigation to try to determine the location of these firms, which has proven to be extremely difficult.” “These companies relocate frequently, and it took us several months to visit each of their locations,” he explained.
The FCCPC boss, on the other hand, stated that investigations revealed that the loan firms were neither Nigerian nor registered in the country, did not have an address, and did not have a license to do business in Nigeria. He also stated that the majority of these businesses were run from the same location and by the same person.
With no physical location, all these businesses have are mobile apps that can be downloaded from the Google and Apple App Stores. As a result, the agency was forced to engage the people who had been their victims and gather additional evidence.
By this point, all of the agencies involved had gathered enough information and evidence to persuade the court to issue a warrant allowing them to conduct an investigation into a search and seizure.
“And then, about a month ago, a court issued a warrant, and between then and now, we were planning a sting operation, which is what you’re seeing here today.” “We wanted to make sure we were hitting in a place where we could get a lot of them,” explained the FCCPC president.
He also stated that the agency had issued an order to Apple and Google to remove their apps from their respective platforms. It has also directed that the bank accounts of these companies be frozen.
When NITDA approved Sokoloan last year, TechCabal predicted that it would be the first of many. It took a little longer than expected, but it’s finally happening.
“That doesn’t mean the people we’re prosecuting today are the only ones—far from it. We’d like to start with them. We also believe there are 5 to 7 companies operating at the same location,” said Irukera, hinting at the agency’s goal of ridding the country of all illegal digital lending practices.
