Representatives investigate activities of fintech products, illegal financial flow

The House of Representatives on Thursday unveiled plans to investigate alleged sharp practices against operators of unregulated online fintech loan companies and misuse of mobile digital loan applications in Nigeria.

The resolution was adopted as a sequel to the adoption of a motion on a matter of urgent public importance sponsored by the Hon. Alhaji Satomi, who called for the intervention of the House.

In his main debate, Hon. Satomi expressed grave concern over the “proliferation of online loan apps across Nigeria by some fake and unscrupulous profiteers who are affecting many low-income Nigerians, who are forced to borrow and are caught in the web of fake loan apps hosted on the Google Play Store by individuals and companies to defrauding the low income earners.

“The House is aware that the covid-19 pandemic affected many economies, including Nigeria, as jobs were lost and incomes were affected, due to shutdowns, restrictions on movement and face-to-face interactions accelerated the digitization of financial services and the infiltration of some unscrupulous unregulated financial services operators.

“The House is alarmed that these predatory lending apps are disguised as platforms where unsuspecting members of the public are promised access to quick loans with no collateral apart from providing a Bank Verification Number (BVN).

“The House is also concerned that such victims are expected to repay loans at astronomical interest rates within 3-7 days as opposed to 91 to 365 days requirement of the Google Play store which has over 83.07% market share in Nigeria.

“The House is also aware that most of these loan apps or companies and individuals are operating without government regulation, expired licenses and in some cases without licensing.

“The House is concerned that search of the registration status of loan apps in Nigeria by the Corporate Affairs Commission (CAC) shows that founding directors of such apps or companies were foreign nationals without the necessary license to run the volume of financial transactions and illegal operations in the country.

“The House is concerned about the operations of Kash Kash with a hosted operating account under the name of Super Car Universal Limited with a certain commercial bank in Nigeria where Kash Kash conducts activities in the loan app, such as the exorbitant interest they collected from customers and defamatory messages sent to contacts to their customers when they missed the repayment date.

“The House is also concerned that one such account holder did not have the necessary license to operate as a moneylender, which led Commercial Bank to close the first account, but such operations were moved to another account called Speedy Choice which is still operating and managed by the same people who managed the previous account.

“The House is again concerned that many of such online loan apps operating in Nigeria that disburse loans to customers without collateral and defaulters are always sent threatening messages and that loan apps and other fintech products can be used for money laundering and other forms of illegal financial flows (IFF).

“The House is hurt that these unregulated Nigerian fintech companies are shaming and threatening customers for late payment of loans.

“The House is aware of the need to investigate the activities of these fintech companies, including OKash, Opay, PayLater, PalmCredit, Branch, QuickCheck, Aella Credit, FairMoney, KiaKia, EasyCredit, NewCredit, Umba, Carbon, FirstNell, SoftNaira, SharpCash, Newcredit , Cash Mall, NairaLand, Naira9ja, New Credit Loan App, Future Cash, SharpCredit, MoneyHub, 9jaCash, Henloan, Get Loan, Plenty Cash, Fundy, iMoneyPlus, CashCredit, LifeLine, Lumos Loan, NairaPlus, Care Finance, CashMe, CashMe , CashMe LoanMe, LifePurse iLoanPro, LairaPlus, OxLoan and NoNowMoney etc,” he noted.

To this end, the House mandated the Joint Committees on Banking and Foreign Exchange, Financial Crimes and Telecommunications to investigate the alleged sharp practices and abuses of fintech and online mobile digital loan apps and companies in Nigeria and report within four weeks.

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