The Federal Competition and Consumers Protection Commission, or FCCPC, has ordered Nigerian telecommunications companies, including Mobile Network Operators (MNOs), and payment systems operators (PSOs), including Flutterwave, Opay, Paystack, and Monify, to cease supporting the activities of money sharks, or illegal digital money lenders.

Babatunde Irukera, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, revealed this yesterday in Lagos during enforcement actions taken by the Commission against Soko Lending Limited, a loan shark. He also mentioned that the FCCPC has obtained orders to prevent or lessen the ability of violators to evade regulatory efforts to safeguard citizens.

In addition, he said that the inter-agency Joint Regulatory and Enforcement Task Force has created and approved a Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending as a stopgap measure to create a clear regulatory framework for the industry.

With numerous apps and brand names that cover a sizable portion of the digital/online lending market, Soko Lending seems to be the most significant digital money lender. He also claims to be one of the most frequent violators of fair lending terms, consumer privacy, and moral loan repayment/recovery procedures.

Although some lenders have developed ways to get around orders to freeze accounts and suspend apps, he remembered that the Commission had previously taken a similar enforcement action that decreased exploitative behavior in the sector.

Irukera went on to say: “The Commission has also adopted further Orders that will hinder or lessen the ability of violators to come up with ways to get around the goal of the investigation and citizen protection.

In particular, the Commission has mandated that all payment systems now in use, such as Flutterwave, Opay, Paystack, and Monify, immediately stop and desist from offering payment or transaction services to lenders that are the subject of an investigation or who are not otherwise operating with the necessary regulatory permits.

Additionally, the FCCPC has mandated that technology and telecommunications firms, including Mobile Network Operators (MNOs), stop offering server and hosting services, as well as other essential services like connectivity, to known or disclosed lenders who are the focus of investigations or who are otherwise operating without regulatory approval.
“As the first and interim step to establishing a clear regulatory framework, the inter-agency Joint Regulatory and Enforcement Task Force has developed and mutually adopted a Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022.”