The National Information Technology Development Agency (NITDA) says it has begun investigation into the activities of online banks, especially loan providers over alleged breach of customers’ privacy and data.
Because Nigerian banks prefer to lend to businesses and not individuals, new companies have filled the gap by offering quick loans through smartphone apps. Startups like Carbon, Branch, and Fairmoney started as simple app-based money lenders before their recent transitions to becoming digital-banks that offer other services.
In November, 2021, the NITDA) said it has received 40 petitions from the public about companies that abuse user data. In August, it imposed a N10 million ($24,000) fine on Soko Lending Company, owners of sokoloan – an app launched in Sept. 2018 that has over 1 million downloads on Google Play Store.
NITDA, Nigeria’s de facto tech regulator, says it is worried about the harm caused by money lenders like sokoloan. And so it is teaming up with the Federal Competition and Consumer Protection Council, Nigeria’s consumer protection and antitrust watchdog, to enforce privacy rights in accordance with the Nigeria Data Protection Regulation (NDPR) enacted in 2019.
According to the Director-General of the agency, Kashifu Inuwa, many Nigerians had recently lamented on social media over alleged unethical and dehumanizing conducts of e-commerce platforms who offer short term loans.