Why FG ordered fintechs to stop registering lending apps

The Federal Government, FG,  has warned all operating payment systems to stop providing payment services to online lenders under investigation.

The Executive Vice Chairman Federal Competition & Consumer Protection Commission, Babatunde Irukera, said this on Thursday while on enforcement actions on premises used for illegal online money lending in Lagos.

He also said the commission was coming with an interim framework where Google would not put up an app unless the app was duly registered.

Irukera said, “The commission has ordered all operating payment systems including Flutterwave, Opay, Paystack and Monify to immediately cease and desist providing payment or transaction services to lenders under investigation or not otherwise operating with applicable regulatory approvals.

“So one of the things that is coming up today is interim framework where Google will not put up any app business in Nigeria unless they show some regulatory approval. That means we have looked at their businesses and operating procedures and seen that they comply with the law. The privacy laws, consumer protection and fairness requirements before will put them on the play store.”

Irukera also said the commission had ordered telecommunication companies to desist from providing server services to lenders who are subjects of investigation.

The commission has also ordered telecommunication, technology companies (including Mobile Network Operators to cease and desist providing server, hosting, or other key services such as connectivity to disclosed or known lenders who are targets, subjects of investigation or otherwise operating without regulatory approval,” he said.

He also said the apps that had been intervened had not been able to come online.

Irukera added that, “They are still more there, we have just discovered that there is another one there that will be taken down. I am sure by the end of today you will discover more. We have other investigative arms that will not require us for us to discover every app and go back to Google play store to be able to address”

“The information available to the commission demonstrates that Soko Lending appears to be the most consequential digital money lender with multiple apps and brand names covering a significant share of the digital, online lending market, and one of the most prolific actors in violating consumer privacy, fair lending terms and ethical loan repayment recovery practices.”