The Federal Competition and Consumer Protection Commission (FCCPC) and the Central Bank of Nigeria (CBN) have increased the number of approved loan app companies in Nigeria to 284 as of May 2024. The FCCPC disclosed this in its updated list of approved digital lenders. The number of approved companies stood at 266 in March this year.
Approval Details
The updated list includes companies with full approval, conditional approval, and those licensed by the CBN. According to the FCCPC database:
- 232 companies have been granted full approval to operate as digital lenders.
- 41 companies have conditional approval.
- The CBN licenses 11 companies to operate loan apps.
Surge in Loan Apps
The increase in approved digital lenders has led to a corresponding rise in the number of loan apps offering instant loans in Nigeria. Many approved digital lenders operate multiple loan apps. For example:
- Acetech Finance Limited operates eight loan apps: Kashout, Flashcredit, Flashalart, Swiftcredit, Rapidloans, Acecredit, Aceloan, and Rapidalarts.
- Newedge Finance Limited, licensed by the CBN, operates through Palm Credit, New Credit, Easybuy, Xcross Cash, and XCash apps.
The proliferation of loan apps makes it challenging for the FCCPC to regulate and control unethical practices, such as harassment and defamation of borrowers.
Government’s Credit Scheme to the Rescue
The FCCPC is now relying on the federal government’s recently introduced consumer credit scheme to curb loan sharks’ excesses. Acting Executive Vice Chairman of the FCCPC, Adamu Abdullahi, highlighted that this scheme aims to provide Nigerians access to collateral-free soft loans, reducing the need for unregistered loan applications.
Statement from FCCPC
“What is happening is because the availability of loans is not there in Nigeria, but you can see that this government, through its Renewed Hope Agenda, came up with a credit scheme,” said Abdullahi. “It has now gone into effect for government workers and will address the gap that the apps were addressing. Once this gap is filled, these companies must comply with regulations or cease operations.”
Key Facts
- Launch of Consumer Credit Scheme: President Bola Tinubu launched the scheme’s first phase in April 2024, initially benefiting civil servants.
- Campaign Policy: The scheme aligns with Tinubu’s campaign policies, as Nigerians borrowed over N740 billion in the first nine months of 2023.
- CREDICORP: The Nigeria Consumer Credit Corporation (CREDICORP), a federally owned entity, has launched a portal for Nigerians to express their interest in obtaining consumer credit. The company aims to increase credit availability to 50% of the working population by 2030.
- 2024 Budget Allocation: The Federal Government allocated N100 billion for the scheme’s initiation in the 2024 budget.
