News & Publications

By: Nneka Oduada Eze (Esq)

Over the weekend, some digital loan companies operating within the confines of Ikeja, Lagos State, were raided in a joint operation conducted by the Nigerian Consumer Protection Agency (NCPA) and the Federal Competition and Consumer Protection Commission (FCCPC). The operations were carried out by the NCPA, FCCPC, Independent Corrupt Practices and Other Related Offences Commission (ICPC), National Information Technology Development Agency (NITDA), and the Nigeria Police Force (NPF). The purpose of the purported raid was due to the “possible violation” of consumer rights.

The operation led by the Chairman of NCPA, in the person of Babatunde Irukera, was in response to several complaints of malpractices against the lenders. Some of the companies that were raided are: GoCash, Okash, EasyCredit, Kashkash, Speedy Choice, Easy Moni which is owned by Blue Ridge. Mr Irukera informed the over 800 employees of these companies the reason for the raid and their rights.

Also, some of the employees of Soko Loan, another lending company operating in another location at Ikeja with over 150 employees protested against the seizure of their equipment.

While addressing the press, Mr Irukere said that: “Because people were on lockdown due to the pandemic, people started needing small easy loans which are understandable, but over a period of time, people started complaining about the malpractices of the lenders so we started tracking it. Sometime towards the end of last year, after gathering quite a lot of information, we started working with some other key agencies like the EFCC, ICPC, National Human Right Commission, CBN, NCC. And FCCPC led the meeting where we all agreed that there would be a joint effort to look into these businesses. “Secondly the interest factor 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.”

Furthermore, Mr Irukera noted that “it was difficult tracking the loan companies, adding that it took them several months because some of the lenders moved from one place to the other. 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 addresses in Nigeria and they are not registered in Nigeria with the Corporate Affairs Commission and they do not have any license to do their businesses. Essentially what they have is an App, and so we started gathering more information, we engaged the public and people who have been their victims gave us more information.”

Mr Irukera informed the press that before conducting the raid, they presented their findings to the court, and got a warrant to “proceed with an investigation into a search and seizure. And sometime last month, a court issued a warrant and between then and now we were preparing a sting operation which is what you are seeing here today because we want to be sure we are hitting at the place where we could get many of them.”

Also, the commission has issued multiple orders and two of them are going to vendors, App stores and Google stores where some of these apps are available to shut down the loan apps so that people will not be victimized anymore.

He also stated that: “I must add though that not all money lenders are operating illegally and that is why it has been taking time for us to track these people.” When the regulatory team visited Soko Loan company in the Ikeja area of the state to enforce another court injunction, they were denied entry and had to force their way in. One of the employees explained that he gets his salary (cash) from a man identified as Philip, adding that his employer is unknown, another identified as Ms Tijani clarified that Soko Loan switched its name to Fast Loan recently. Meanwhile, some employees had waited outside to lament the employment crisis in the country and demanded that their equipment that were seized by the team be returned.”

Although it is important to state that employing people where there is employment crisis in a country in furtherance of illegal activities can never be a justification to allow illegality strive. These loan companies rose to prominence due to the economic impact of the COVID-19 lockdown vis-a vis the harsh economic meltdown and inflation currently being undergone in the country.

There is no denial of the fact that these lending companies offer short-term loans to help subscribers meet urgent needs. However, they resort to unprofessional measures of harassment, cyber-bullying, and breach of data privacy of their customers who may have defaulted in loan repayment. There is a cause for concern on the naming and shaming of borrowers and violation of their privacy by these companies with which is tactically how their loans are recovered. Also, as earlier stated, most of these companies are wholly foreign owned and unregistered, operating and carrying on business within the Nigerian soil which is not only illegally/disturbing, but a violation of existing law.

While there is no denial of countless occasions of abrupt disregard for citizen’s privacy/rights by these loan shark companies, bearing in mind the high level of unemployment which poses currently as a serious threat to the Nigerian economy, the best approach to salvage such situation should be the establishment of some regulatory frameworks/more institutions (if need be) that will checkmate the modus operandi of these loan companies including serial loan defaulters.

This will not only promote a welcoming environment for intending foreign investors in the country which is in line with one of the core objective of the Corporate Affairs Commission on the ease of doing business in Nigeria, but will also in return generate revenues for the country at large. Furthermore, it will also serve as an avenue of more job creation in this fast rising sector of the economy. This will not only aid the creation of legitimate means of livelihood, but will further positively impact in the reduction of cyber crimes rate currently faced by the country. This way, it will be a win-win situation for the government, agencies, current/intending investors, the economy and the citizens in a holistic perspective.