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The Federal Government, through the Federal Competition and Consumer Protection Commission (FCCPC), is gearing up to introduce additional regulations for the digital lending sector in 2024. These regulations aim to enhance loan recovery methods in Nigeria, addressing the challenges posed by increasing default rates.
During a recent TVC live program, Mr. Babatunde Irukera, the Chief Executive Officer of the Commission, revealed this strategic move. Despite the FCCPC’s successful reduction of harassment in the sector, Irukera emphasized the persistent high levels of loan defaults among Nigerians.
He stated, “One of the big issues that we are seeing is that there is now a significant level of loan default because people are not able to use these unethical and inappropriate loan recovery mechanisms, and I am insistent that you cannot say to me that the only language Nigerians understand is to abuse them. No, I disagree.”
Acknowledging the importance of finding more sensible ways to recover loans, Irukera emphasized the need to strike a balance. He highlighted that the upcoming regulations in 2024 would take a broader approach to responsible borrowing and lending by individuals and corporations.
Looking ahead, Irukera expressed hope for a future where even landlords of schools could report to a centralized credit system regarding the conduct of tenants, students, and parents. This would contribute to assessing each person’s level of fiscal responsibility or creditworthiness.
The FCCPC had recently announced a substantial reduction in harassment and defamatory messages in the digital lending sector, achieving an 80 percent improvement. Irukera, during a media chat, pointed out that Nigeria faced similar challenges in digital lending with countries like India, Kenya, Brazil, Ghana, and Uganda, all navigating complexities in this evolving industry. He mentioned that some of these countries were drawing lessons from Nigeria’s initiatives in this domain.
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