FG, Google Unveil Four Operational Requirements For Loan Apps, Aggregators

Google has stated that digital loan apps will no longer be able to access users’ data such as photos, videos and contacts amongst others.

Recall that the Federal Government had stated that it was working with Google to curtail the illegal activities of lending apps after several complaints against the loan apps. 

Digital lending apps have been accused of blackmailing debtors in a bid to recover the debt. The operators of the apps access users’ contacts and send false messages to the debtors’ contacts in order to embarrass the debtor into repaying the debt. 

Loan apps often disburse funds to users without collateral in a bid to increase their users, which makes it difficult for them to retrieve the debt. Their method of loan recovery has been described as a breach of privacy. 

The government agency, Federal Competition and Consumer Protection Commission (FCCPC), has been in talks with Google over requirements for loan apps that should be shown to Nigerians on Google Play Store.

Aside from blocking the lending apps from accessing sensitive information or data belonging to Play Store users, Google said starting from May 2023, it will start demanding letters of approval signed by the FCCPC. 

“To operate as a Personal Loan App in Nigeria, it is mandatory for Digital Money Lenders (DML) to comply with the limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022 (as may be amended from time to time) set by the Federal Competition and Consumer Protection Commission (FCCPC) of Nigeria. 

“DMLs must also furnish verifiable approval letters obtained from the FCCPC. 

“Loan Aggregators, on the other hand, are required to provide certification and documentation for their digital lending services, as well as contact information for every partnered DML. 

“Additionally, upon request by Google Play, you must submit any supplementary information or documents to demonstrate your compliance with the regulatory and licensing requirements that are applicable to your operations,” Google said in its statement. 

The decision follows the crackdown on several loan apps in Nigeria by the FCCPC, which led to the shutdown of some digital lenders.

Nigeria requested that several loan apps, such as Soko Loan, should be brought down by Google – a directive the internet company implemented.

Also, the government recently licensed the operation of 117 digital loan apps in Nigeria.