The Nigerian Federal Government has unleashed its powers to police some loan apps that have violated customer privacy. The apps are; Okash, GoCash, EasyCredit, KashKash, Easy Moni, Speedy Choice, and Sokoloan.
In the recent past, Digital Loans have gained popularity because of their convenience in giving out short term loans.
However, the apps are slowly being unfavored as they have been accused of many vices, including blatant personal information violation, harassment and sky high interest loans. The Nigerian government is the first to take action on the apps that violate private customer information.
In Kenya, for instance, the apps have come under scrutiny following mass reports that they were using illegal means to recover loans such as harassing customers and using their personal information to shame them in a bid to compel them to pay.
This issue was raised in the Kenyan Parliament, and legislators started developing a law that would tame the space altogether.
In 2021, the CBK Amendment bill was signed into law. The bill required the CBK to publish regulations about loan apps by March 23, 2022. The regulations cover aspects of licensing, governance, and credit operation of online lenders.
Once the law will be enforceable. It will imply that companies that dispense online loans will be required to put in place appropriate policies, procedures and systems to ensure the confidentiality of customer information and transactions.
There are other regulations about loan recoveries, including a case where the law cites that agents must not use threats or obscene language when talking to their customers.
In Kenya, there are tens, probably more loan apps that have infiltrated the space and will be highly affected by the proposed regulations. The apps have been successful in their venture, albeit illegal in some instances, because of M-PESA that allows them to send cash right away to a loanee’s wallet.
It wouldn’t be surprising to see some of them close shop considering the regulations are very tough, and wouldn’t see them survive in the market.