The invisible world of Nigerian online lending and the challenge of cleaning up the sector


It’s no laughing matter but everywhere in Nigeria, someone is chasing someone, in the financial sector. Now the consumer protection watchdog has recruited fintechs to hunt down online lenders. But you know what? These fintech companies don’t stand a chance since some of these online lenders are NOT even registered in Nigeria. It’s like voodoo how they still operate with bank accounts to cause so much trouble.

As I explained at a banking conference in South Africa, when someone tried to point out the poor level of Nigeria national budget (~$42 billion depending on your exchange rate) to South Africa’s $157 billion, Nigeria is a place where most things are beyond the power of governments. In South Africa, you pay taxes on your properties and land.

In Nigeria there is nothing like this on a large scale and people keep their funds. If you include these informal non-claims, Nigeria’s budget would be much higher (an annual tax of 0.5% on property and land in Lagos, Abuja and River State will add significantly to the respective jurisdictional/national budgets). Unfortunately for the government, the money is with the people and there is nothing to spend.

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This explains why a loan company has become invisible and invincible because the government has no way to stop it since it was never even registered with the government! In physics, you have an optical illusion; here you have a financial illusion. You keep running but you never get there.

Read the Head of Consumer Protection (FCCPC), Mr. Babatunde Irukera.

“Information available to the commission demonstrates that Soko Lending appears to be the largest digital money lender with multiple apps and brand names.

“He covers a significant portion of the digital or online lending market and one of the most prolific players in violating consumer privacy, fair lending terms, and ethical loan repayment/collection practices.

“Prior to this operation, the commission had previously, on March 11, 2022, taken similar enforcement action against several lenders; whose action and continued investigation have reduced the unethical, heinous and unscrupulous operating practices previously high and growing in the industry.

“With today’s operations, the commission expects a significant further reduction in these unacceptable practices. The commission also today issued new orders that will disable or diminish the ability of violators to devise circumvention efforts or alternative mechanisms to circumvent the purpose of investigating and protecting citizens.” FCCPC Executive Chairman, Mr. Babatunde Irukera

The FCCPC has banned all Fintechs from providing payment or transaction services to online money lenders in Nigeria

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