Google has ordered loan apps in Nigeria and Kenya to provide proof of license to operate in the country, or risk being taken down from the Google Play store.
This move according to Google was necessitated to protect borrowers from rogue loan apps, otherwise known as “loan sharks”, many of which charge borrowers outrageous interest rates as well as operating against legal provisions.
Both existing and new loan apps in Nigeria and Kenya are mandated to submit the requisite documents and information, or risk being locked out at the end of January 2023.
Tekedia Mini-MBA edition 16 (Feb 10 – May 3, 2025) opens registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
For loan apps in Nigeria, Google mandates them to adhere to the following;
- Digital Money Lenders (DML) must adhere to and complete the LIMITED INTERIM REGULATORY/ REGISTRATION FRAMEWORK AND GUIDELINES FOR DIGITAL LENDING, 2022 (as may be amended from time to time) by the Federal Competition and Consumer Protection Commission (FCCPC) of Nigeria and obtain a verifiable approval letter from the FCCPC.
- You must, upon Google Play’s request, provide additional information or documents relating to your compliance with the applicable regulatory and licensing requirements.
Considering the fact that Nigeria Kenya and are the major tech hubs in Africa, they have witnessed a surge in the proliferation of loan apps, which offer quick unsecured personal loans of up to $500.
However, the lack of stringent regulations, and Google Play Store’s slapdash vetting process, have attracted rogue operators necessitating authorities to take apt measures to protect citizens.
These loan apps have been ordered to desist from the use of threats or debt-shaming actions, such as the posting of customers’ personal information on online forums, unauthorized calls and messages to customers, and access to their contacts lists for purposes of contacting them in case of default.
The new law requires loan apps to reveal their pricing model, terms, and conditions to consumers in advance. These apps are also expected to notify regulators before introducing new products or making changes to existing ones, in addition to disclosing and providing evidence of their sources of funds.
In Nigeria, there has been a battle against several loan apps by the Federal Competition and Consumer Protection Commission (FCCPC) over their outrageous interest rates and the invasion of customers’ privacy.
The commission in August urged search engine company Google to remove some loan apps, from the Playstore due to their unethical practices.
The FCCPC also ordered fintech platforms such as Modify, Opay, Paystack, and Flutterwave to desist from providing payment or transaction services to loan apps under investigation.