By Christiana Ekpa
The House of Representatives, Thursday resolved to investigate alleged sharp practices levelled against operators of unregulated online fintech lending companies and abuse of mobile digital loan applications in Nigeria.
The House resolution followed the adoption of a motion on a matter of urgent public importance sponsored by Hon. Alhaji Satomi, who solicited for the House intervention.
Hon. Satomi, while Presenting the motion expressed grave concern over the “proliferation of online loan apps across Nigeria by some fraudulent and unscrupulous profiteers affecting many low-income Nigerians, who are coerced to borrow and get trapped in the web of sham loan apps hosted on Google Play Store by individuals and companies to swindle the low-income earners.
“Aware that the COVID-19 pandemic 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 sped up the pace of digitalisation of financial services and the infiltration of some unscrupulous unregulated financial service operators.
“Disturbed that these 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 House is also disturbed that such victims are expected to repay loans at astronomical interest rates within 3-7 days as against the 91 to 365 days claim on Google Play store which has over 83.07% market share in Nigeria.
“The House is also aware that most of these loan apps or companies and individuals operate with no regulation by the government, expired licenses and in some cases, no licensing.
“The House is concerned that searches for the registration status of loan apps in Nigeria from the Corporate Affairs Commission (CAC) show that founding directors of such apps or companies were foreign nationals without the required license to operate the volume of financial transactions and illegally operating in the country.
“The House is worried about the operations of Kash Kash with a hosted operating account under the name Super Car Universal Limited with a certain commercial bank in Nigeria where Kash Kash, carries out activities of the loan app, such as the exorbitant interest rates they collected from customers and defamatory messages sent to contacts of their customers when they missed their repayment date.
“Worried that such an account holder did not have the required license to operate as a money lender, which led the Commercial Bank to close the first account, but such operations were moved to another account named Speedy Choice which is still operational and managed by the same people who managed the previous account.
“The House is again worried that many of such online loan apps operating in Nigeria disbursing loans to customers with no collateral and defaulters are always sent threatening messages and that Loan apps and other fintech products can be used for money-laundering and other forms of illicit financial flows (IFF).
“The House is pained that these unregulated Nigerian fintech companies shame, and threaten customers for late payment of loans.
“The House is cognizance of the 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 etc,” he noted.
The House mandated it’s joint 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 and report within four weeks.
