Nigerian fintechs to block predatory digital money lenders


The FCCPC has ordered Nigerian fintechs to stop providing payment or transaction services to digital money lenders as part of its investigation.

Nigerian fintechs to block predatory digital money lenders
Babatunde Irukera, vice-president of the FCCPC

The Federal Competition and Consumer Protection Commission (FCCPC) has ordered all financial technology companies (FinTechs) to stop providing payment or transaction services to digital money lenders as part of its investigation .

FCCPC Vice Chairman Babatunde Irukera revealed this on Thursday during a raid on Soko Lending Limited, a predatory digital money lender operating in Nigeria. Irukera said the commission obtained orders to disable or diminish the ability of violators to circumvent regulatory efforts to protect citizens.


Predatory lending is any form of lending that involves unethical lending practices aimed at enforcing unfair and abusive loan terms on borrowers. Predatory lenders use deceptive and aggressive sales tactics to entice unsuspecting borrowers into taking out loans they cannot afford.

In June, a briefing by Nigerian journalist, David Hundeyin revealed that the company’s registered CAC address was fictitious and had no license or regulatory approval from the Central Bank of Nigeria (CBN).

“Soko Lending appears to be the largest digital money lender with multiple apps and brand names covering a significant portion of the digital/online lending market, and one of the most prolific players in privacy breaching consumers, fair loan terms and ethical loan repayment/recovery practices,” Irukera said.

Following a series of complaints against Soko Lending Limited over data privacy breaches, the National Information Technology Development Agency fined the company ₦10 million. However, its activities and those of other predatory digital lenders continue to persist in the country.

Earlier in March 2022, the FCCPC closed and froze the ban accounts of six other predatory lending operators: GoCash, Okash, EasyCredit, Kashkash, Speedy Choice and Easy Moni. Although the commission ordered Apple and Google to remove these companies’ apps from their platforms, these lending apps are still available on those platforms at the time of this report.

Although banned by the FCCPC, Google did not remove EasyCredit.

Even though the introduction of digital lending has provided an easily accessible source of credit to individuals who would otherwise be disenfranchised by the traditional financial system, the infiltration of digital lenders involved in predatory lending practices presents the need for actors of space to actively curb the threat.

The PCCF has developed a limited interim regulatory/registration framework and guidelines for digital lending which has been adopted by the Joint Interagency Regulatory and Enforcement Working Group as an interim step to establish a regulatory framework clear to the sector.

Related article: How to Attack Predatory Lending in Nigeria

Most of these digital lenders offer loans as low as ₦5,000 and up to ₦150,000, depending on the borrower’s track record, with repayment periods typically capped at 30 days and interest rates ranging from 20 % to 28% per month.

The borrower is promised a gradual reduction in interest rates and an increase in credit limits in exchange for continued patronage and timely repayment. Although rates are almost never reduced, borrowers who have built their financial stability around these loan offers keep falling back, and the vicious cycle continues.