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The Federal Competition and Consumer Protection Commission (FCCPC) has announced plans to introduce additional regulations for digital lending operators in 2024, aiming to enhance loan recovery methods amid increasing default rates in the country. Despite a reduction in harassment within the sector by the FCCPC, Chief Executive Officer Babatunde Irukera highlighted persistently high default levels among Nigerians.
He emphasized, “A major concern is the notable increase in loan defaults due to the absence of unethical and inappropriate recovery methods. I firmly reject the notion that the only effective communication with Nigerians involves abusive tactics. No, I disagree.
“We must diligently explore alternative methods for loan recovery, recognizing the complexity of the task. I acknowledge that if digital money lenders struggle to recover loans and exit the market, it poses a consumer protection issue for those relying on short-term unsecured lending.”
We need to strike a balance, and some of the forthcoming regulations in 2024 will adopt a comprehensive approach to encourage responsible borrowing and lending by both individuals and corporations. I am optimistic that our evolving framework will enable even landlords of schools to contribute to a centralized credit system, reporting on the financial conduct of tenants, students, and parents. This way, we can assess each individual’s level of fiscal responsibility or creditworthiness.”
The FCCPC recently reported a reduction of harassment and defamatory messages in the sector by approximately 80%.
Irukera commented, “Countries like India, Kenya, Brazil, Ghana, and Uganda are still grappling with challenges in digital lending. Some of these nations are drawing insights from our experiences.”
