House Seeks Stringent Measures to Curtail Excesses of Online Loan Providers

Adedayo Akinwale in Abuja

The House of Representatives has demanded stringent measures to curtail the activities of online loan providers. The resolution of the House followed the adoption of a motion moved by Hon. Akin Alabi at the plenary yesterday.

Moving the motion, Alabi noted that the impact of the COVID–19 pandemic on the global economy has been significant, with evidence across all sectors of the economy.

He said to cushion the impact of the pandemic, a rising number of Nigerians have resorted to digital lenders to sort out urgent financial needs as access to loans from the traditional financial institutions is often a long and painstaking process.

The lawmaker added that there was a growing increase in the number of digital lending service providers who have seemingly simplified the lending process and increased access to loans remotely and quickly.

Alabi added: “Concerned that several lending platforms are operating outside the principles of lawful processing of personal data as required under the Nigeria Data Protection Regulation and other relevant provisions on data protection in Nigeria.”

He further expressed concern that many online loan providers are exploiting the growing need for financial assistance and engaging in unfair collection practices by subjecting Nigerians to situations where their contacts are besieged with unsolicited messages from the loan providers in a bid to force the borrowers to pay.

Alabi pointed out that the online loan providers have resorted to a pesky habit of shaming as a tactic to get their customers to pay and taking actions that are tantamount to privacy violation, intimidation, and harassment.

He lamented that some online lenders operating in the country do not have a privacy notice while some privacy notice of those who have is often not comprehensive enough to explain how a user’s data is processed.

The lawmaker expressed worry that the recovery agents for the lending firms are mostly unprofessional and often apply unethical methods including impersonating lawyers and security officers, in a bid to recover borrowed funds from defaulting clients;.

He said the Nigerian Data Protection Regulation was established due to the government’s recognition that information must be safeguarded, regulated and protected against atrocious breaches.

The House therefore mandated its committees on Banking, Communication and Human Rights to investigate the matter and report back to thr House.