Digital Lenders Face Prosecution and Hefty Fines For Debt-Shaming In Nigeria

Loan Apps Kenya

The whip is cracking, and it is doing so loudly across the African continent on rogue digital lenders, out of increased concerns on an invasion of the privacy of their users (which amounts to cyberbullying), and damaging of reputation with their acquaintances.

In Kenya, we have followed the journey of the fight against these unscrupulous and predatory lenders, a fight backed by the concerned parliamentary committee and the Central Bank of Kenya.“I will send your names to all your contacts and destroy you if you want me to lose my job since you won’t pay on time.” One user in Nigeria reports having received this from a debt collector with iMoney, a mobile loan app.

This is just one of the messages in the many reported to be sent to borrowers in Nigeria, threatening and insulting defaulters, and the country’s technology regulator has had enough.

The National Information Technology Development Agency (NITDA) of Nigeria has received complaints from the public about the lenders, prompting their action towards prosecution. These apps include Soko Loan, which NITDA fined ₦10 million (Approx. KES 2.7 million) recently for tampering with user private data.

Such a fine, first of its kind, was in accordance with the Nigeria Data Protection Regulation (NDPR) enacted in 2019. NITDA is partnering with Nigeria’s consumer protection and antitrust watchdog to enforce the right to privacy in such digital platforms.

In Kenya, these loan sharks have been perennially infringing the provisions of the Data Protection Law of 2019 as well. The Central Bank of Kenya is working with lawmakers to create a legal framework in an amendment bill that will help in governing this vastly unregulated new financial products and services.

Kenya’s Data Commissioner this month announced the launch of an investigation on digital money lending applications, after receiving 67 complaints from the public.

The National Information Technology Development Agency (NITDA) in Nigeria reports having 40 petitions against these companies, signaling a dire situation for borrowers in both countries, which are top hotspots of developed fintech on the continent.