INTRODUCTION

Shortly after covid19 pandemic, there was an increase in the number of online digital lenders. It is not uncommon to receive unsolicited messages from these companies requiring you to borrow money in less that 5minutes with no collateral. This was very attractive and many Nigerians fell for this trick. The long-term effect of this is that the interest is always huge sometimes more than 50percent of the loan sum and to make the matter worse, the lenders have the contact numbers of the borrowers’ families and friends who they send messages to when the borrower defaults.
It is in light of this that the Federal Competition and Consumer Protection Commission (“FCCPC”) in August 2022 issued a guideline to all digital lending institutions to register with them before starting operations. By so doing, the FCCPC will be able to checkmate their unethical practices and high-interest rates.

Who should register with the FCCPC
All digital lending institutions must by this guideline register with the FCCPC before they can operate.
However, the registration does not apply to the banks and financial institutions that are licensed by the Central Bank of Nigeria. This is contained in section 65a of the Bank and Other Financial Institutions Act, 2020 (the “BOFIA”)

How to register with the FCCPC
1. Filling of form DGL 001:The form contains the following
a) address and website
b) identity and nationality of promoters, directors and initial key role players.
c) the source(s) of funding including equity, debt or otherwise
d) affiliations with any other companies, institutions or similar businesses, whether domestic, regional or global; consultants, agents, or any person assisting with the registration process, operations, or management and proposed interest rate regime and loan balance calculation including CBN or a state government) and a list of all Apps in operation or intended for operation.
2. Fill out a declaration (Form 002).

3) The lending platform will also provide the following
a) a certified copy of the certificate of incorporation of the applicant;
b) a brief description of the business;

c) an organogram showing role players and the location of key role players;

d) name and address of a person within the business who is authorized to accept all correspondence and accept service on behalf of the businesses;

e) evidence of membership in any trade or professional associations;

f) any service level agreements with any service providers;

g) evidence of feedback and complaint resolution mechanism;

h) evidence of tax payments or tax waivers where applicable

(i) all applicable fees associated with service;

Conclusion
The digital lending guideline is a welcome development. The FCCPC will be able to check the unethical practices of this lending institution and there will no more harassment of the borrowers again.

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