The Nigerian Government is planning to probe some digital loan apps over what has been described as alleged sharp practices and abuses.
The Committee on Banking and Currency, Financial Crimes and Telecommunications has been mandated by the House of Reps to commerce some investigations. This investigation is geared toward operations and loan administration of fintech companies and online digital loan apps in Nigeria.
What Is The Probe On Fintechs About?
This probe came as a result of a motion under matters of urgent public importance. It was moved at the plenary by Hon. Ahmed Satomi from Borno state and is titled;
“Need to Investigate Sharp Practices By Unregulated Online Fintech Lending Companies and Abuse of Mobile Digital Loan Apps in Nigeria”.
According to the probe, these unregulated Nigerian fintech companies shame and threaten customers for late payment of loans. Fintech companies who will be probed are;
- Aella Credit
- Cash Mall
- New Credit Loan App
- Future Cash
- Get Loan
- Plenty Cash
- Lumos Loan
- Care Finance
Santomi noted the proliferation of online loan apps across Nigeria by “some fraudulent and unscrupulous profiteers affecting many low-income Nigerians. These set of people are forced to borrow and get trapped in the web of the sham loan apps hosted on Goggle Play Store by individuals and companies to swindle the low-income earners”.
In his words, he said;
“These predatory lending apps are disguised as platforms where unsuspecting members of the public are promised access quick loans with no collateral except the provision of bank verification number (BVN).”
“Such victims are expected to repay loans at astronomical interest rates within 3-7 days as against the 91 to 365 days claim on Google Play store which has over 83.07% market share in Nigeria.”
“Most of these loan apps or companies and individuals operate with no regulation by government, expired licenses and in some cases, no licensing.”
He ended by saying,
“The lawmaker expressed concern that searches for the registration status of loan apps in Nigeria from the Corporate Affairs Commission (CAC) show that founding directors of such apps or companies were foreign nationals without the required license to operate the volume of financial transactions and illegally operating in the country.”
Adopting the motion, the House gave the committee 4 weeks within which to conclude the assignment and report back to the House for further legislative action.
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