The House of Representatives has moved to introduce stiffer measures against online loan providers in the habit of harassing supposed guarantors, who in most cases know nothing about such loans.
The House Wednesday mandated its relevant committees, including that of Banking and Currency, and of Communications to investigate the trend and report the findings back, for the House’s further legislative action
This was a fallout of a motion on the “Need to Apply Stringent Measures to Curtail the Excesses of Online Loan Providers,” sponsored by Akin Alabi, who recalled that the Coronavirus pandemic’s far–reaching impact on the global economy has been significant, with evidence across all sectors of the economy, due to which “a rising number of Nigerians have resorted to digital lenders to sort out urgent financial needs.”
He noted that the rise was further helped as access to loans from the traditional financial institutions is often a long and painstaking process, adding that “there is a growing increase in the number of digital lending service providers who have seemingly simplified the lending process, and increased access to loans remotely and quickly.”
The lawmaker said several lending platforms are however operating outside the principles of lawful processing of personal data as required under the Nigeria Data Protection Regulation and other relevant provisions on data protection in Nigeria”, a loophole he argued many online loan providers are exploiting.
He said due to the growing need for financial assistance, the providers were engaging in unfair collection practices by subjecting Nigerians to situations where their contacts are besieged with unsolicited messages from the loan providers in a bid to force the borrowers to pay.