FCCPC Discloses Plan to Implement A New Regulatory Framework to Tackle The Escalating Debt Rate in 2024

The  Federal Competition & Consumer Protection Commission (FCCPC), has disclosed its plan to unveil a new regulatory framework, designed to tackle the escalating debt rate in 2024.

This was announced by the Chief Executive Officer of the commission, Mr. Babatunde Irukera, who expressed concerns over the alarming rate of indebtedness to digital money lenders, and the need to address it.

Mr. Irukera who had earlier said that the FCCPC had successfully reduced harassment and abuse of defaulters by 80%, however, disclosed that Nigerians who patronize these apps have continued to default. He further noted that if not properly addressed, the rising debt could lead to the collapse of the digital lenders that play a crucial role in Nigeria’s economy.  

In his words,

“One of the big issues that we’re seeing is that there’s now a significant level of loan default because people are not able to use these unethical and inappropriate loan recovery mechanisms and I’m insistent that you cannot say to me that the only language Nigerians understand is to abuse them. No, I disagree.  

“We must necessarily do the work no matter how hard it is to find a more sensible way to recover loans because I also agree that if these digital money lenders are unable to recover their loans and drop out of the market, it’s a consumer protection problem because of those who need those types of short-term unsecured lending.

“So, we have to find the balance and so some of the regulations that will come out in 2024 will be abroader approach to responsible borrowing and responsible lending by individuals and corporates. I’m hopeful that the future of what we’re building is that even school landlords would be able to report to a centralized credit system about the conduct of tenants, students, and parents so that we can know each person’s level of fiscal responsibility or credit wordiness.”  

Mr. Irukera further disclosed that the commission can address the high rate of indebtedness, if there is a central place where they could get information about individuals and their creditworthiness. 

While the FCCPC is developing a new regulatory framework to address Nigerians’ rising indebtedness to digital money lenders (DMLs), the commission has continued to play a crucial role in banning illegal loan apps to protect consumers’ interests.