The Federal Competition and Consumer Protection Commission (FCCPC) has disclosed that it would release more regulations for operators in the digital lending space in 2024 to improve loan recovery methods in the country in the face of rising default rates. The regulations will also seek to promote responsible borrowing from Nigerians.
Chief Executive Officer of the Commission, Babatunde Irukera, revealed that there are high levels of default from Nigerians, despite the reduced rate of harassment in the sector by the FCCPC.
According to him: “One of the big issues that we are seeing is that there is now a significant level of loan default because people are not able to use these unethical and inappropriate loan recovery mechanisms, and I am 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 is 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 responsible lending by individuals and corporates.
“I am hopeful that the future of what we’re building is that even school and landlords would be able to report to a centralized credit system about the conduct of tenants, students, and parents so that we can know each person’s level of fiscal responsibility or credit wordiness.”
The FCCPC recently revealed that it has reduced harassment and defamatory messages from digital lenders in the sector by about 80%.
“India, Kenya, Brazil, Ghana, and Uganda are still struggling in digital lending. Some of these countries are taking lessons from what we have done,” Irukere concluded.
