This latest development comes amid the government's plan to curtail the invasion of customers’ privacy by loan apps, an issue that has been a cause of concern to customers and the industry regulator.
The government's decision was backed by Google’s recent announcement where it confirmed it will restrict loan apps registered on its Play Store from accessing sensitive user data such as photos, videos, and contacts.
This move also aims to attend to the growing concerns about predatory lending practices by these loan apps In Africa—especially Nigeria and Kenya as most of the lenders have been found guilty of adopting debt-shaming and unethical practices to force their customers into repayment.
Most loan apps have gone as far as labelling loan defaulters as ritualists and wrongfully announcing their deaths using their photos while others found a way to send very disturbing messages to the debtor’s friends and family after gaining access to the debtor’s phone contacts.
“Apps that provide personal loans, or have the primary purpose of facilitating access to personal loans (i.e., lead generators or facilitators), are prohibited from accessing sensitive data, such as photos and contacts,” the company said in the update.
The Federal Competition and Consumer Protection Commission (FCCPC) had earlier confirmed that out of the 173 companies that were registered to operate as loan companies in the country, the commission gave conditional authorization to 54 loan applications while 119 got full approvals.
The FCCPC, in partnership with Google, had also made available, a new policy guideline that would require all loan apps operating in Nigeria to provide an approval document from the FCCPC or risk being removed from Google Play Store.
Google’s policy update released in April 2023 said the new policy would save customers that patronized these loan apps from the crude loan retrieval methods employed by a majority of the digital lenders.