The House of Representatives has decided to introduce tougher measures against online loan providers who have a habit of harassing so-called guarantors, who in most cases know nothing about these loans.
The House on Wednesday mandated its relevant committees, including banking and currency, and communications, to investigate the trend and report on the results, with a view to further legislative action by the House.
It was a fallout from a motion on “The need to apply strict measures to reduce the excesses of online loan providers”, sponsored by Akin Alabi, who recalled that the considerable impact of the pandemic outbreak on the global economy has been significant, with evidence across all sectors of the economy, leading to “growing numbers of Nigerians turning to digital lenders to address urgent financial needs.”
He noted that the increase has been further facilitated as accessing loans from traditional financial institutions is often a lengthy and laborious process, adding that “there is a growing increase in the number of digital lending service providers who have apparently simplified the lending process, and increased access to loans remotely and quickly.
The lawmaker said that several lending platforms however operate outside the principles of lawful processing of personal data, as required by the Nigerian Data Protection Regulation and other relevant data protection provisions in Nigeria ” , a loophole he argued that many online loan providers exploit.
He said that due to the growing need for financial assistance, providers engage in unfair collection practices by subjecting Nigerians to situations where their contacts are besieged with unsolicited messages from loan providers in an attempt to force borrowers to pay.