A number of illegal online banks have been closed in Africa’s largest economy. Nigeria’s Federal Competition Consumer Protection Commission (FCCPC) led the charge in collaboration with other agencies such as the Independent Corrupt Practices and other Related Offences Commission (ICPC), National Information Technology Development Agency,(NITDA) and the Nigerian Police Force. They carried out a joint operation and raided some illegal financial institutions operating on Opebi Road, Ikeja, Lagos.
The names of the financial institutions affected were, GoCash, Okash, EasyCredit, Kashkash, Speedy Choice, Easy Moni.
According to the FCCPC, the raid is in response to customers’ complaints of malpractices by the financial institutions.
Speaking during the raid, the Chief Executive Officer, FCCPC, Babatunde Irukera, explained that customers had accused the financial institutions of violating their privacy in their debt recovery drive.
He said the agency had begun investigations into the allegations since 2020. He further adds that, “This information started quite a while ago. Some time ago, when the country was on lockdown in 2020 due to the pandemic, we started seeing the rise in money lenders”
“Because there was lockdown due to the pandemic, people needed small easy loan which is understandable. But over a period of time, people started complaining about the malpractices of the lenders, so we started tracking it”
“Towards the end of last year, we gathered quite a lot of information. We started working with some other key agencies and the FCCPC led the meeting where we all agreed there would be a joint effort to look into these businesses.”
According to Irukera, the interest rate charged by online financial institutions appear to violate the ethics of how lending is done.
He also said, “The key two things that were subject of concern were what seems to be the naming and shaming violation of people’s privacy with respect to how these lenders recover their loans.”
“Secondly, the interest rate 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.”
“So, we started an investigation trying to determine the location of these firms. That has been a very difficult thing. We did that for several months and some of them have moved from one place to the another and we have been visiting these places for months.”
