The House of Representatives decided to investigate the activities of illegal financial technology companies and mobile application lenders.
The House mandated its Committee on Banking and Currency; Financial Crimes; and Telecommunications to investigate the alleged sharp practices and abuses by FinTech and online mobile digital loan apps and companies in Nigeria and report within four weeks.
According to information gathered from Punch Newspaper, the resolution was based on the unanimous adoption of a motion of urgent public importance moved by a member of the House.
Satomi decried the proliferation of online loan apps across Nigeria by some fraudulent and unscrupulous profiteers affecting many low-income Nigerian who are coerced to borrow and get trapped in the web of sham loan apps hosted on Google Play Store by individuals and companies to scam the low-income earner.
Many economies, including Nigeria, were affected by the COVID-19 epidemic, as jobs were lost and incomes were affected due to restrictions on movement and face-to-face interactions.
The pace of digitalisation of financial services was sped up by these factors.
The House is disturbed by the fact that these lending apps are camouflaged as platforms where members of the public are promised access to quick loans with no collateral except the provision of a Bank Verification Number.
The House is disturbed by the fact that such victims are expected to repay loans at high interest rates within three to seven days, as against the 91 to365 days claim on the Google Play store, which has over 83.07 per cent market share in Nigeria.
Satomi further noted that most of these loan apps or companies and individuals operate with no regulation by the government, expired licenses and in some cases, no licensing.
According to him, searches for the registration status of loan apps in Nigeria from the Corporate Affairs Commission show that the founding directors were foreign nationals without the required license to operate the volume of financial transactions and illegally operating in the country.
He said, “The House is worried about the operations of Kash Kash, with a hosted operating account under the name Super Car Universal limited with a certain commercial bank in Nigeria, where he carries out activities of the loan app, such as the exorbitant interest rates they collected from customers and defamatory messages.
The House is worried that such an account holder did not have the required license to operate as a money lender, which led the commercial bank to close the first account, but such operations were moved to another account named Speedy Choice which is still operational and managed by the same people who managed the first.
The House is worried that many online loan apps operating in Nigeria, disbursing loans to customers with no collateral and defaulters, are always sent threatening messages and that loan apps and other fintech products can be used for money laundered and other forms of illegal financial flows.
The House is pained that unregulated Nigerian companies threaten customers with late payment of loans.
The lawmaker, therefore, urged the House 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, Cashbean, CashMe, LoanMe, LifePurse iLoanPro, LairaPlus, OxLoan and NoNowMoney.”
