The Federal Government began the shutdown of some illegal online banks as they intensify their enforcement drive on unlicensed online money lenders across the country.
This is happening few months after the government set up a committee to investigate the money lending industry on the regulation violations and the unfair practices in the industry and subsequently shut them down.
The Federal Government stated that those money lenders who were not registered with the Corporate Affairs Commission (CAC) were engaged in activities that were against the rights of Nigerian consumers. The Vice Chairman/Chief Executive Officer of the Federal Competition and Consumer Protection Commission (FCCPC), Mr Babatunde Irukera, disclosed this during an enforcement exercise on a money lender company in Lagos.
Mr. Babatunde who led a team of operatives and men of the Nigeria Police Force on the enforcement exercise frowned at the shaming violations of people’s privacy with respect to how these lenders recover loans. He further demonstrated his displeasure of these money lenders as they violate the ethics by imposing high interest rates on the loans incurred by people.
The FCCPC boss said that investigations had revealed that the loan firms were neither Nigerian companies nor registered by the CAC as most of these companies operate from the same place and are operated by the same person.
In a report by Punch Newspaper, the names of the online banks affected by the shutdown included; GoCash, Kashkash, Speedy Choice, Easy Moni, EasyCredit, among others.
What the FCCPC CEO is saying
The FCCPC boss said that the COVID-19 lockdown in 2020 gave birth to the existence of these online money lenders where people started needing small easy loans, which is understandable.
“However, over a period of time, people started complaining about the malpractice of the lenders. So, the commission started tracking it.
“The two key things that were the subjects of concern were what seems to be naming and shaming, violation of people’s privacy with respect to how these lenders recover the loans.
“Secondly, the interest rate seems to be a violation of the ethics on how lending is done. So, those were the two things that we set out to look for.
“We started an investigation trying to determine the location of these people and that has been a very difficult thing.
“We did that for several months and found that one of them has moved from one place to the other and we have been visiting this place for months.”
Irukera said the commission found out that most of the companies operate from the same place and actually by the same person, adding that such unlicensed online money lenders in Nigeria do not have addresses in the country and are not registered in Nigeria with the CAC nor have any license to do their businesses.
- Recall that earlier in November 2021, the Federal Government moved to check some of the illegal, unwholesome , and unfair practices in the money lending industry with the setting up of a joint committee to address the situation.
- The joint committee consists of representatives from FCCPC, the CBN, the Economic and Financial Crimes Commission (EFCC), National Information Technology Development Agency (NITDA), and the National Human Rights Commission (NHRC).
- The FCCPC had in December 2021, given a notice that the joint committee that was set up by the Federal Government to tackle violation of consumer rights and unfair practices in the money lending industry will shut down illegal businesses at the commencement of its enforcement.