Hundreds of digital lenders are still operating illegally in Nigeria, the Federal Competition and Consumer Protection Commission (FCCPC) has disclosed.
This is even as the commission has decried its inability to ban them, despite several efforts.
The chief executive officer, FCCPC, Babatunde Irukera, while reacting to a post on X alleging that FCCPC’s officials are allowing the illegal Digital Money Lenders (DMLs), to continue to operate because they were taking bribes from them, disclosed that, wallets on Payment Solution Service Providers’ (PSSP) platforms are used by a number of illicit DMLs also referred to as loan apps.
Recall that solution/application development, merchant service aggregation and collections, and payment processing gateway and portal operations are all permitted under a PSSP licence.
A PSSP licence does not provide the authorisation to hold customers’ funds or create and issue wallets. PSSPs are predominantly Financial Technology (FinTech) companies that enable and facilitate online and offline payment solutions which include collections, check-out, biller aggregation and payout services.
Presently, 75 businesses hold PSSP licences, according to the Central Bank of Nigeria (CBN). Several of these are Flutterwave, Appzone, Fincra Technologies Limited, and Eyowo Integrated Payments Limited.
Despite the FCCPC’s efforts to legalise the operations of the loan apps through its registration framework, hundreds of digital lenders are still operating illegally in the country, the Commission’s CEO said, adding that it is impossible to ban them.
“Sadly, the agency cannot stop the operations of illegal loan apps despite its efforts,” Irukera regretted.
Explaining further, the CEO said, though DMLs work online, once their bank accounts are frozen, they transfer their transactions to PSSP wallets.
“No way to stop DMLs operating actually. They spring up daily in different places on the internet using APKs and when bank accounts are frozen, they operate by wallets through PSSPs. We are chasing every day, but won’t ever stop them all. Nothing to do with bribes please,” Irukera averred.
