On Wednesday, November 16, 2022, Google Play announced updates to its Developer Program Policy, which are expected to come into force from January 31, 2023.
According to these updates, digital money lenders in Nigeria must conform to rules established by the Federal Competition and Consumer Protection Commission (FCCPC). Additionally, they will be required to provide Google Play with other information that proves their compliance with the appropriate regulatory authorities in the country.
In Kenya, digital credit providers will be required to complete the personal loan app declaration for Kenya and obtain a licence from the Central Bank of Kenya (CBK). Apps not directly involved with money lending will also be required to make that obvious while including their partners’ licences.
In August 2022, Nigeria’s FCCPC released the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending to curtail predatory lending practices in the country. In addition to filling out a digital lending guidelines form, digital lenders in the country are expected to furnish the FCCPC with the following documents:
- A certified copy of the applicant’s certificate of incorporation.
- A brief description of the applicant's business and, where relevant, their groups.
- An organogram showing role players and the location of key role players and any operational approving authorities/person.
- Name and address of a person within the business authorised to accept all correspondence and accept service on behalf of the business.
- Evidence of membership in any trade or professional associations.
- Any service level agreements with any service providers with respect to operations but excluding administration.
- Evidence of feedback and complaint resolution mechanism.
- Evidence of tax payments or tax waivers where applicable.
- All applicable fees associated with service.
- FCCPC INTERIM DIGITAL LENDING GUIDELINES FORM 002 – Declaration for Digital Lending Businesses in Nigeria.
In the past few years, personal loan apps have become increasingly common as traditional financial institutions baulked at providing lending services for most Africans.
In Nigeria, less than five per cent of the adult population has access to credit facilities, with businesses also affected. Women are the worst hit, as only two per cent of Nigerian women have access to credit.
This gap has resulted in personal loan apps stepping into the arena by providing loans at sky-high interest rates and often using predatory tactics to recover loans from customers.
In August 2021, the National Information Technology Development Agency (NITDA) hit Sokoloan with a ₦10 million ($22,635) fine for privacy invasion. This came as widespread reports emerged of the company’s predatory lending activities.
Later, in November 2021, the Agency would partner with the FCCPC, the Economic and Financial Crimes Commission (EFCC), the Central Bank of Nigeria (CBN), the National Human Rights Commission (NHRC), and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) to fight data privacy abuse in the country’s digital lending space.