Amid the abuse by some online loan applications, the House of Representatives has resolved to investigate the activities of illegal financial technology companies and mobile application lenders who threaten debtors for failing to repay loans.
The house on Thursday during its plenary mandated its Committee on Banking and Currency, Financial Crimes and Telecommunications to investigate the alleged sharp practices and abuses.
Investors King gathered that the resolution was a result of a public urgent motion moved at the plenary by Hon. Ahmed Satomi from Borno State.
While presenting the motion titled “Need to Investigate Sharp Practices By Unregulated Online Fintech Lending Companies and Abuse of Mobile Digital Loan Apps in Nigeria”, Hon. Satomi noted the proliferation of online loan apps across Nigeria by “some fraudulent and unscrupulous profiteers is affecting many low-income Nigerians, who are coerced to borrow and get trapped in the web of sham loan apps hosted on Google Play Store by individuals and companies”.
The lawmaker further revealed that the adverse effects of Covid 19 has affected jobs and several households. He noted that many of the online loan apps are taking advantage of such an economic situation to drive borrowers with statements like “no collateral except the provision of a Bank Verification Number” while charging exorbitant interest on short-term loans.
He said, “The House is also disturbed that such victims are expected to repay loans at astronomical interest rates within three to seven days, as against the 91 to 365 days claim on the Google Play store”.
Satomi also claimed that a search shows that “Most of these loan apps or companies and individuals operate with no regulation by government, expired licence and in some cases, no licensing.”
Some of the loan apps to be investigated include Henloan, Get Loan, Plenty Cash, Fundy, iMoneyPlus, CashCredit, LifeLine, Lumos Loan, NairaPlus among others.
While Adopting the motion, the House gave the committee 4 weeks within which to conclude the assignment and report back to the House for further legislative action.
