The house of Representatives has directed its Committees on Banking and Currency, Financial Crimes and Telecommunications to investigate the alleged sharp practices and abuses by fintech and online mobile digital loan apps and companies in Nigeria.
This was a sequel to the adoption of a motion of urgent public importance by a member from Borno state, Ahmed Satomi at plenary.
The lawmaker stated that there is an increase in the number of online loan apps across Nigeria by some fraudulent and unscrupulous profiteers.
This according to him is affecting many low-income Nigerians, who are coerced to borrow and get trapped in the web of sham loan apps hosted on the Google PlayStore by individuals and companies to swindle low-income earners;
Mr Satomi attributed the proliferation of these apps to the COVID-19 pandemic, which affected many economies including Nigeria as jobs were lost and incomes were affected, due to the lockdowns, restrictions on movement and face-to-face interactions that sped up the pace of digitalisation of financial services.
He expressed concern that the predatory lending apps are disguised as platforms where unsuspecting members of the public are promised access to quick loans with no collateral except the provision of a bank verification number (BVN).
The lawmaker noted that most of the loan apps or companies and individuals operate with no regulation by the government, expired licenses, and in some cases, no licensing.
“There is a need to investigate activities of these fintech companies including OKash, Opay, PayLater, PalmCredit, Branch, QuickCheck, Aella Credit, FairMoney, KiaKia, EasyCredit, NewCredit, Umba, Carbon, FirstNell, SoftNaira, SharpCash, Newcredit, Cash Mall, NairaLand, Naira9ja, New Credit Loan App, Future Cash, SharpCredit, MoneyHub, 9jaCash, Henloan, Get Loan, Plenty Cash, Fundy, iMoneyPlus, CashCredit, LifeLine, Lumos Loan, NairaPlus, Care Finance, Cashbean, CashMe, LoanMe, LifePurse iLoanPro, LairaPlus, OxLoan and NoNowMoney amongst others.”
Satomi added that victims of such loans are expected to repay loans at astronomical interest rates within 3-7 days as against the 91 to 365 days claim on the Google Play store which has over 83.07% market share in Nigeria.
The house committees were given four weeks to complete the assignment and report back to the house.