FG plans Stricter regulations for Opay, Moniepoint, others

The Federal Competition and Consumer Protection Commission (FCCPC) is poised to enact a new wave of regulations within Nigeria’s digital lending space, targeting the surging defaults plaguing the sector.

In a recent appearance on a TVC live program, Mr. Babatunde Irukera, the CEO of the Commission, unveiled plans for forthcoming regulations slated for 2024. These measures aim to refine loan recovery methods, addressing the pressing issue of escalating default rates among Nigerian borrowers.

Acknowledging the FCCPC’s successful crackdown on harassment in the industry, Irukera pointed out persistent challenges linked to high default rates among Nigerians seeking digital loans. He vehemently rejected the notion that abusive methods represent the only effective means of communication with borrowers.

Emphasizing the necessity for more ethical and effective loan recovery mechanisms, Irukera stressed the significance of finding sensible approaches. He underscored the potential consumer protection repercussions if digital lenders struggle to retrieve loans, potentially exiting the market, and affecting those relying on short-term unsecured lending.

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Scheduled for 2024, the upcoming regulations aim to take a broader approach toward fostering responsible borrowing and lending practices among both individuals and corporations. Irukera also envisioned a scenario where landlords of educational institutions could contribute to a centralized credit system, providing insights into individuals’ fiscal responsibility and creditworthiness.

Highlighting recent achievements, the FCCPC reported a notable 80% reduction in harassment and defamatory messages within the digital lending sector. Irukera, speaking in a media interaction, acknowledged Nigeria’s challenges in digital lending, noting similar struggles in countries like India, Kenya, Brazil, Ghana, and Uganda.

The impending regulations signal the FCCPC’s concerted efforts to strike a balance between consumer protection and maintaining a sustainable digital lending landscape. As Nigeria anticipates these pivotal changes, the global spotlight remains on evolving strategies to navigate the complexities of digital lending while safeguarding the interests of consumers.