The Nigeria Data Protection Commission (NDPC) has announced an extensive investigation into more than 400 instances of privacy violations associated with digital loan firms, commonly known as loan sharks, operating in Nigeria. This revelation comes from the Nigeria Data Protection Annual Report 2023.
The NDPC has underscored its commitment to collaborate with regulatory bodies to address issues within the digital lending sector. According to the report, the commission is actively working with regulators under the Joint Enforcement and Regulatory Taskforce (JERTF) to sanitize the digital lending space.
The NDPC emphasized the necessity for lending companies to obtain data protection clearance from the commission before commencing operations. Each online lending company is required to undergo a comprehensive Data Privacy Impact Assessment to ensure full compliance with the Nigeria Data Protection Act (NDPA).
The annual report disclosed that “over 400 cases of privacy breaches involving shadowy loan sharks are being addressed at the systemic level.” Additionally, the JERTF approved 203 loan applications in the fourth quarter of 2023, with 38 applications receiving conditional approval. Currently, 85 companies and apps are under scrutiny, and 47 loan apps were delisted during the same period.
Furthermore, the NDPC highlighted efforts to incorporate data protection measures into regulatory policies, starting from the design phase. This move aims to enhance data security and safeguard consumer privacy within the digital lending ecosystem.
In a related development, in March 2022, the Federal Competition and Consumer Protection Commission (FCCPC), in collaboration with enforcement agencies, conducted raids on the offices of “illegal” digital loan companies operating in Ikeja, Lagos. This action was prompted by alleged consumer rights abuses.
Babatunde Irukera, the former executive vice-chairman of the FCCPC, led the enforcement operation and emphasized the significance of bringing these loan apps under the regulatory framework. “We discovered that this is much more serious than we thought,” Irukera remarked during the operation.
The ongoing investigations and regulatory actions reflect the authorities’ commitment to addressing privacy violations and ensuring accountability within the digital lending industry in Nigeria.
