The Federal Competition and Consumer Protection Commission (FCCPC) is gearing up to unveil new regulations tailored to the digital lending sphere in 2024. These forthcoming guidelines aim to revamp loan recovery methods in Nigeria amidst a surge in default rates.
CEO of the Commission, Mr. Babatunde Irukera, shared these insights during a recent TVC live program. He highlighted that although the FCCPC has significantly curbed harassment in the sector, there persists a concerning trend of loan defaults among Nigerians.
Irukera emphasized the need for ethical and appropriate loan recovery mechanisms, stressing that abusive tactics should not be regarded as the sole method to communicate with borrowers. He underlined the importance of striking a balance, acknowledging that an inability to recover loans by digital lenders could impact consumers in need of short-term unsecured lending options.
The upcoming regulations set to be introduced in 2024 will adopt a broader approach to responsible borrowing and lending for individuals and corporate entities. Irukera expressed hope in establishing systems that would enable entities like school landlords to report the financial conduct of tenants, students, and parents to a centralized credit system. This, he believes, will facilitate a better understanding of individuals’ financial responsibility or creditworthiness.
Recently, the FCCPC revealed a remarkable 80% reduction in harassment and defamatory messages within the digital lending sector. Irukera highlighted that Nigeria’s struggle with digital lending was not unique, citing similar challenges faced by countries like India, Kenya, Brazil, Ghana, and Uganda. He noted that some of these nations were observing and learning from Nigeria’s initiatives in this space.
