As the new year unfolds the Nigeria Federal Government has disclosed its plans to crackdown on unlicensed fintech startups in 2022. The government will regulate the fintech startups through the Central Bank of Nigeria, CBN. This is amidst the rise in the online financial services market championed by fintech startups.
According to the Federal Competition and Consumer Protection Commission (FCCPC) which states that the joint committee addressing violations of consumer rights in the money lending industry will shut down the illegal firms.
The main purpose for the Federal Government in Nigeria to bring a crackdown on unlicensed fintech startups in 2022 is because most of the financial providers are currently unregulated by any government agency. And they operate in a variety of activities such as savings, loans, mico-investments, and digital currency trading.
The FCCPC’s Chief Executive Officer, Babatunde Irukera, told the News Agency of Nigeria (NAN) in Abuja on Sunday that the committee will shortly begin operations.
Representatives from the FCCPC, CBN, and the Economic and Financial Crimes Commission (EFCC) make up the joint committee.
The National Information Technology Development Agency (NITDA) and the National Human Rights Commission (NHRC) are also members of the group.
According to Irukera, the committee will also be creating interim regulations for money lending organizations.
“The joint committee is meeting and agreeing on how to proceed, but I can say that two of the entities of the joint committee will be going on the field and doing enforcement work now.”, NAN quoted Irukera as saying.
“They will be closing down businesses and engaging app stores to shut down certain applications that are infringing and abusive.
We are also going to be writing interim regulations and some basic information for all these money lenders to provide information so that people will know who they are.
Some of them are just apps that we do not even know who the promoters are.
So we are going to provide certain frameworks for them to comply with before doing business”.
Irukera said the commission was working on a memorandum of understanding (MoU) with the National Insurance Commission (NAICOM) to address the growing number of consumer complaints regarding insurance company service.
According to him, as the MoU is expected to be concluded early next year, further industry-wide activities in that area are expected.
“We get a lot more complaints about the insured who have paid their premium and have not been settled, and so we are engaging NAICOM on that”, he said.