The number of companies approved to provide loans to Nigerians through digital platforms popularly known as loan apps has surged to 380 this February from 320 in October last year.
The 380 companies now serving the digital loan market have secured approval from either the Federal Competition and Consumer Protection Commission (FCCPC) or a license from the Central Bank of Nigeria to provide the service.
A look at the FCCPC database shows that 322 of the digital lenders have been granted full approval by the Commission, while 42 others are operating with conditional approval.
The database also includes 16 companies licensed by the CBN, bringing the total number of approved digital lenders to 380.
Meanwhile, as the number of digital lenders is growing, there have also been rising concerns over the mode of operations of some of the companies.
Sharing her experience with one of the popular digital lenders, a customer, Ijeoma, said she had clicked on the app she regularly used to take a loan of N100,000 but later realized she was given N1 million.
She called customer care to complain about what had happened and she was asked to pay N1.118 million within three days to liquidate the loan, meaning she would be paying an extra N118,000 to return the money she did not request.
For Tola, there was a case of unsolicited loan by another popular licensed loan app company and he had to pay with interest.
“Two months ago, a flash notification came up on my screen, when I checked it, I discovered that I had been given a loan of N100,000 to repay N130,000. I didn’t request the loan, even though I had used the app before.
“All efforts to return the money proved abortive, I had to repay the loan over time and deleted the app after,” he shared.
Naijaonpoint earlier reported the accounts of some workers in a popular loan app company, who narrated how they were being forced to push out unsolicited loans to people through their targets.
According to them, the mandate from their employers is to get loans disbursed to as many people as possible on a daily basis and by all means.
While the FCCPC is currently playing the role of regulator in the digital lending space, stakeholders said the Commission would need to step up beyond registering and granting approval to digital lenders and start proper policing of their operations.
“It is not enough to issue a licence or grant approval based on the fact that they have met certain conditions set by the FCCPC, the regulator needs to monitor these lenders and ensure that they are operating in ethical ways, especially, how they disburse loans and how they recover their loans,” said Mr. Gbolagunte Ajayi, a financial analyst.
He added that many of the licensed loan app companies are engaging in the same unethical practices that loan sharks are known for, but the FCCPC seems to be oblivious to this.
However, the FCCPC said it has continued to monitor the digital lending space and the regulatory activities have led to the delisting of 47 loan apps from the Google Play store, while 88 are currently under its watchlist.
However, the FCCPC said it has continued to monitor the digital lending space and the regulatory activities have led to the delisting of 47 loan apps from the Google Play store, while 88 are currently under its watchlist.