This measure will take effect on May 31, 2023, and all the loan apps found on the Apple and Google Play Stores will lose their ability to access their users’ contacts or photos.

Before now, there were several reports of loan apps invading customers’ privacy by sending sometimes derogatory messages to their contacts with debtors’ photos attached.

However, the Nigerian government through the Federal Competition and Consumer Protection Commission decided to enforce Google’s policy, claiming that the action was consistent with the move to limit loan app firms’ invasion of customers’ privacy.

Google stated in its April 2023 policy updates that the new policy update would provide relief to loan app users in Nigeria and other countries who had grown accustomed to the crude loan retrieval methods used by the majority of loan apps.

Google said, “Policy preview (effective May 31, 2023): This article previews changes included in our April 2023 policy updates.
“We are updating our personal loans policy to state that apps aiming to provide or facilitate personal loans may not access user contacts or photos.

“We are introducing additional requirements for personal loan apps targeting users in Pakistan. Personal loan apps in Pakistan must submit country-specific licensing documentation to prove their ability to provide or facilitate personal loans.”

The Commission’s “Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending 2022” tries to regulate the digital lending space by requiring registration and approval for companies that want to operate in it.

Despite the fact that Google’s policy states that it does not “allow apps that promote personal loans that require repayment in full in 60 days or less from the date the loan is issued,” many loan apps in the country do not follow it, exposing many Nigerians to confidential data leaks.

According to the FCCPC, it has recently approved 173 digital lending applications to operate in the country. 119 of these received full approvals, while 54 received conditional approvals. This action became necessary after loan apps began harassing Nigerians by sending defamatory messages to their contacts, among other things.

The move is expected to further improve the regulatory environment for digital lending in Nigeria.

119 have full approvals, while the remaining 54 have conditional approvals. The move follows the FCCPC’s registration drive to protect citizens from the unsavory practices of loan apps.

The governing body issued a document titled “Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending 2022” to regulate the digital lending space and make registration and approval mandatory for firms wanting to operate in the industry.

The FCCPC has now released a list of approved loan apps that can operate in the country. Companies without approval will not be able to operate in the digital lending space.

Recall that Google had also taken action to enforce regulatory compliance, removing unapproved loan apps from its Play Store in Kenya in March.

In August 2022, the FCCPC said, “In addition to the enforcement action(s) and in furtherance of the desire to promote fair, transparent, and mutually beneficial alternative lending opportunities apart from traditional lending to consumers, the inter-agency Joint Regulatory and Enforcement Task Force has developed and mutually adopted a Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022, as the first and interim step to establishing a clear regulatory framework.

“This becomes enforceable immediately. It requires permission to proceed in digital lending; it provides a limited moratorium period for existing businesses to comply to continue in digital lending.

“The guidelines also mandate different service providers in the relevant ecosystem (such as banks, access/download platforms or stores, technology providers and payment systems) to require regulatory approval before providing services.”

In February 2023, the Nigeria Data Protection Bureau revealed that a national committee made up of federal agencies was working to curb the activities of illegal loan apps in the country.