Nigeria’s Federal Competition & Consumer Protection Commission (FCCPC) is working. I think the team there is doing a great job. Since Babatunde Irukera arrived, we have seen decent reforms there. We commend all the team for serving.
Yet, I want to challenge the FCCPC on the new frameworks: “The Federal Competition & Consumer Protection Commission (FCCPC) has announced plans to roll out a new regulatory framework to address the rising debt rate to loan apps in 2024.” I do think we know why people are borrowing more as the matter is clear: sovereign, corporate and consumer debts in Nigeria are climbing, and that typically happens when incomes and expenses cannot balance without loans. This calls for a more nuanced approach as we unveil new frameworks.
Yes, if a man needs to borrow N10,000 to take his sick child to a hospital and only online lenders can provide that fund, blocking that N10,000 to save him from debt, may not be appreciated by him. Indeed, we need to invest efforts to deepen responsible lending and borrowing, and that includes a credit system in the nation. There is no way we can protect the citizens and the lenders without developing a functioning credit system, and I challenge FCCPC to drive that playbook, especially in the consumer domain.
“One of the big issues that we’re seeing is that there’s now a significant level of loan default because people are not able to use these unethical and inappropriate loan recovery mechanisms and I’m insistent that you cannot say to me that the only language Nigerians understand is to abuse them. No, I disagree.
“We must necessarily do the work no matter how hard it is to find a more sensible way to recover loans because I also agree that if these digital money lenders are unable to recover their loans and drop out of the market, it’s a consumer protection problem because of those who need those types of short-term unsecured lending.
“So, we have to find the balance and so some of the regulations that will come out in 2024 will be abroader approach to responsible borrowing and responsible lending by individuals and corporates. I’m hopeful that the future of what we’re building is that even school landlords would be able to report to a centralized credit system about the conduct of tenants, students, and parents so that we can know each person’s level of fiscal responsibility or credit wordiness.
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“So, we can address that if there is a central place where they could get information about individuals and their creditworthiness. If you don’t have access to credit you must build your responsibility and your creditworthiness and so there’s quite a lot still in the pipeline that we’ve been working on and we anticipate that 2024 will cause that to emerge.”
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