The Federal Competition and Consumer Protection Commission (FCCPC) has authorised 173 digital lenders to operate in Nigeria, an increase from the 106 players that the commission announced earlier in January. The complete list includes 119 lenders who have received full approval and about 54 lenders who received “conditional approval.”
The FCCPC is updating the list as it continues to verify the digital lenders through its regulatory framework dubbed the “Limited Interim Regulatory/ Registration Framework and Guidelines for Digital Lending 2022.[pdf]” This framework was released in August 2022, amid sanctions and calls to Nigerian fintechs to block predatory digital lenders. Following the announcement, digital lenders were given a 90-day ultimatum to register for approval, which was later extended to January 31st, 2023.
FCCPC describes its current regulatory framework as the ”first and interim step to establishing a clear regulatory framework.” But despite the short-term nature of the framework, global tech behemoth Google is taking the FCCPC’s approval as a regulatory seal to decide which digital lending apps remain on its Play Store platform—a move the FCCPC CEO, Babatunde Irukera, is excited about.
“Google has been very supportive, including providing their expert knowledge and experience in advising about what works best in achieving laudable regulatory objectives,” he said.
Google is playing the pseudo-regulator role as it works with Nigeria’s FCCPC and Kenya’s apex bank to enforce compliance in Africa’s digital lending space. In Kenya, Google reportedly took down hundreds of unlicenced loan apps from the Play Store last month, despite industry cries that the CBK’s licence is difficult to obtain.
Some of the FCCPC’s approved loan apps include Sycamore, Trade Depot, Branch, Fairmoney, Pivo, PayHippo, BlackCopper, and Trade Lenda
Earlier in February, the Nigeria Data Protection Bureau (NDPB) revealed that a national committee made up of federal agencies was working to limit the activities of illegal credit providers in the country. This move will further tighten the regulatory environment for the lenders.
The digital lending markets in Nigeria and Kenya are the continent’s largest. These lenders provide the much-needed cash that powers the daily lifestyle of mass populations in Africa. But where regulators sleep, bad actors reign, and the people suffer. Now, the FCCPC and the CBK are jointly raising the standard for digital lenders in Africa. Perhaps, this could be the dawn of a saner microlending industry across the continent.