Ongoing crackdown on illegal financial service providers

By Cynthia Alo

Amid the boom in the online financial services industry backed by FinTech companies, Fintechs, the federal government may be on the verge of limiting activities to those authorized and regulated by the Central Bank of Nigeria, CBN.

At present, most of the operators are not regulated by any government authority and they engage in activities ranging from savings and loans, micro-investments and digital currency trading.

The Federal Competition and Consumer Protection Commission (FCCPC) said the joint committee to fight consumer rights violations in the money-lending industry will shut down illegal businesses.

Giving this indication, FCCPC chief executive Babatunde Irukera told Nigeria’s NAN news agency in Abuja on Sunday that the committee would begin operations soon.

The joint committee is made up of representatives from the FCCPC, the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC).

Other agencies participating in the committee are the National Information Technology Development Agency (NITDA) and the National Human Rights Commission (NHRC).

Irukera said the committee will also draft interim regulations for money lending companies.

“The joint committee will meet and agree on how to proceed, but I can say that two of the entities of the joint committee will be going into the field and doing enforcement work very soon,” NAN said citing Irukera.

“They will shut down businesses and hire app stores to shut down certain apps that are counterfeit and abusive.

“We’re also going to write draft regulations and background information for all of these money lenders to provide information so people know who they are.

“Some of them are just apps that we don’t even know who the promoters are.

“So we’re going to provide them with certain frameworks that they have to comply with before doing business.”

Regarding the growing number of consumer complaints about the services provided by insurance companies, Irukera said the commission was making progress on its memorandum of understanding with the National Insurance Commission (NAICOM).

According to him, it is expected that, as the MoU will be completed early next year, there will be more industry-wide interventions in this space.

“We’re getting a lot more complaints about policyholders who have paid their premium and haven’t been paid, so we’re engaging NAICOM on this,” he said.
The article The Crackdown on Illegal Financial Services Providers first appeared on Vanguard News.

Stephen V. Lee