The Nigerian government has shut down several illegal financial institutions operating in Lagos.
Among the financial institutions affected were GoCash, Okash, EasyCredit, Kashkash, Speedy Choice, Easy Moni.
The Federal Competition Consumer Protection Commission (FCCPC) in collaboration with the Independent Corrupt Practices and other Related Offences Commission (ICPC), National Information Technology Development Agency (NITDA), and the police raided some of the facilities on Friday.
Chief executive of FCCPC Babatunde Irukera said the raid was in response to customers’ complaints of malpractices and violation of privacy by the financial institutions in recovering debts.
“This information started quite a while ago. Some time ago, when the country was on lockdown in 2020 due to the pandemic, we started seeing the rise in money lenders,” he said.
“Because there was lockdown due to the pandemic, people needed small easy loan which is understandable. But over a period of time, people started complaining about the malpractices of the lenders, so we started tracking it.”
According to Irukera, the interest rate charged by online financial institutions appear to violate the ethics of how lending is done.
He further said, “The key two things that were subject of concern were what seems to be the naming and shaming violation of people’s privacy with respect to how these lenders recover their loans.
“Secondly, the interest rate seems to be a violation of the ethics on how lending is done. So, those were the two things that we set out to look for.”
The FCCPC boss, however, said investigations had revealed that the loan firms were neither Nigerian companies nor registered in the country.
“We found out that most of these companies operate from the same place. We also found out that many of them are actually operated by the same person. They are not Nigerian companies, they don’t have an address in Nigeria and they are not registered in Nigeria with the Corporate Affairs Commission and they do not have any licence to do their business,” he said.
As a result, Irukare said the agency had written to global app companies asking them to suspend the operations of the online banks.