Participants at the maiden Consumertrics workshop, held in Lagos, have advocated proper regulation of digital loan sharks.
The experts, who spoke on the theme Responsible Borrowing and Lending: Balancing Access to Credit and Consumer Protection, deplored the unethical practices of many loan sharks and the usual breach of financial consumers’ data privacies.
Muyiwa Ayojimi, the CEO of Consumertrics, called for tougher application of consumer protection laws.
He stated that banks’ stringent loan processes have erected barriers within the country’s huge credit market, thereby giving rise to the proliferation of illegal loan sharks.
Mr. Babatunde Irukera, the CEO of the Federal Competition and Consumer Protection, (FCCPC), said that the practices of many digital lenders violate Section 17 of the FCCPC Act.
Irukera spoke through his representative Mr. Marvin Nadah, the deputy director- Enforcement at the Commission. Some of the violations, he said, include “high interest loan rate; payable default fee, and unethical loan recovery methods. He added the agency, the Central Bank of Nigeria (CBN), and other institutions are collaborating to ensure compliance to regulatory guidelines.
Mr. Clem Omife, deputy director consumer affairs representing the Executive Vice Chairman of the Nigerian Communications Commission (NCC) Professor Umar Dambatta, said the CBN needed to take a cue from its Kenyan counterpart on how it is regulating the digital lenders effectively.
Ridwan Oloyede, a data privacy professional, said some digital loan sharks use specific software development kits that enable them to monitor borrowers’ real-time activities, including their intimate moments. He said consumers’ should be careful about granting loan sharks access to their mobile data, as doing so makes them vulnerable to privacy invasion. He urged state licensing digital lenders to carry out strict oversight, like federal counterparts.
Olawale Eleto, the head of credit analysis for business banking, Union Bank of Nigeria Plc, agreed that digital lenders require strict supervision. He however said that some borrowers too are only out to defraud the lenders. He therefore urged both lenders and borrowers to act responsibly.
Other panellists who spoke at the workshop included Dr. Jamelaah Sharieff-Ayedun, managing director of CreditRegistry; Mr. Femi Daniel, Mastercard’s lead regional privacy counsel (for Eastern Europe, Middle East, and Africa); Mr. Clem Baiye, a former National commissioner with NCC and Indepenedent director Transmission Company of Nigeria; Afolabi Solebo, the managing director of the Lagos state Consumer Protection Agency (LASCOPA); Mr. Olawale Eleto, Head Credit Analysis (for Business Banking), Union Bank of Nigeria Plc.