Federal Competition and Consumer Protection Commission (FCCPC) gears up to address challenges posed by digital money lenders, unveiling plans for 2024 regulations.

In a bid to confront the mounting issue of Nigerians’ indebtedness to digital money lenders (DMLs), commonly known as loan apps, the Federal Competition and Consumer Protection Commission (FCCPC) has declared its intention to devise a robust regulatory framework.

This revelation was made by Mr. Babatunde Irukera, the Chief Executive Officer of the Commission, during a recent appearance on a live TVC program on Monday.

Irukera highlighted the pressing concern surrounding the burgeoning indebtedness to DMLs, identifying it as a significant industry challenge that demands immediate attention. Earlier interventions by the FCCPC to curtail predatory lending practices utilized by some loan sharks resulted in a shift in their debt recovery strategies, prompting a considerable number of loan apps to modify their approaches.

While these interventions successfully reduced the prevalence of abuse and harassment by loan apps, Irukera pointed out that default rates among borrowers continued to soar. He warned about the potential collapse of digital lenders critical to the economy if this trend persists.

Addressing Default and Ethical Recovery Measures

Emphasizing the need to shift away from unethical loan recovery mechanisms, Irukera said: “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.”

He advocated for a balanced approach to responsible borrowing and lending, hinting at upcoming regulations in 2024 aimed at fostering fiscal responsibility among individuals and corporations.

“So, we have to find the balance and so some of the regulations that will come out in 2024 will be a broader approach to responsible borrowing and responsible lending by individuals and corporate,” he said.

Highlighting the significance of a centralized credit system, Irukera proposed extending reporting capabilities to various entities, such as school landlords, to contribute to assessing an individual’s creditworthiness. He suggested that limiting access to credit based on one’s fiscal responsibility could incentivize self-regulation among borrowers and enhance loan recovery.

“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,” he added.

Progress and Ongoing Efforts

Under the interim regulatory framework, the FCCPC has made substantial strides, witnessing an 80% reduction in harassment and defamatory practices by loan apps. However, acknowledging the remaining 20%, Irukera affirmed that efforts are underway to address these challenges.

The Commission has taken steps to register over 200 loan apps, a move aimed at sanitizing the digital lending market and eradicating unethical practices such as defamation and harassment of borrowers. As of the latest update, the FCCPC has approved a total of 211 digital lenders, illustrating its commitment to streamlining the sector.

Addressing the regulatory challenges of emerging industries

Irukera noted the evolving nature of the interim regulatory framework, citing the emergence of fintech not just in Nigeria but globally. He stressed the importance of learning from industry operations and dynamics to develop an optimal regulatory ecosystem.

The CEO expressed optimism regarding the upcoming 2024 regulations, foreseeing their emergence as a pivotal moment in reshaping the lending industry. These regulations aim not only to protect consumers but also to foster responsible borrowing practices and ensure the sustained operation of digital money lenders integral to the country’s financial sector.

In an effort to cushion the impact of the fuel subsidy removal, the World Bank has escalated its financial support to Nigeria, increasing its disbursement from $300 million to $315 million. The funds, part of an $800 million allocation for the National Social Safety-Net Program Scale Up (NSSP-SU), have been specifically directed to alleviate the economic strains faced by the most vulnerable sectors of society.

This development was disclosed in the Implementation Status & Results Report for the project, which highlighted that while $315 million has been disbursed, a remaining balance of $428.31 million is yet to be allocated. Out of the $800 million, $600 million is earmarked for the Economic Shock Responsive Cash Transfer (ESR-CT), $147 million for the Extended Regular Cash Transfer (ER-CT), and $53 million for strengthening the delivery system and project management.

According to the World Bank document, the Federal Government initially aimed to assist five million beneficiaries by mid-December. However, only about 1.5 million households have received cash transfers, a mere 0.1% of the intended target of 15 million households. Moreover, there has been a modification in the cash transfer scheme, with the monthly support revised from an initial N5,000 to N25,000 over three months, as communicated by the Federal Ministry of Humanitarian Affairs and Poverty Alleviation.

The modification aligns with efforts to intensify support for those affected by the removal of the fuel subsidy. The document states partly, “The Federal Ministry of Finance has approved the commencement of disbursements and project implementation. Since then, the project has made an initial drawdown of USD 315 million, and commenced initial cash transfers to poor and vulnerable households, with about 1.5 million households already receiving transfers in their accounts.”

It has been revealed that project-implemented units are collaborating with the Central Bank of Nigeria (CBN) and the National Identity Management Commission (NIMC) to streamline beneficiary enrolment, issuing Bank Verification Numbers (BVNs) and National Identity Numbers (NINs) for account operations. This move aligns with the CBN’s directive that all bank accounts without BVN and NIN will be placed on “Post no Debit” from April 2024, with a mandate for revalidation by January 31, 2024.

The National Social Safety Net Programme-Scale Up, sanctioned by the World Bank in December 2021 and scheduled to continue until June 30, 2024, is spearheaded by the Federal Ministry of Humanitarian Affairs & Poverty Alleviation. The $800 million initiative aims to execute a monthly cash transfer program for impoverished Nigerians affected by recent policy changes, including the fuel subsidy removal.

In a separate event in October 2023, President Bola Tinubu formally launched a conditional cash transfer program set to benefit 15 million households nationwide, providing N75,000 within three months. This initiative adds to the ongoing efforts to mitigate the economic repercussions of policy adjustments.

While the increased disbursement signifies progress in aiding vulnerable populations, criticisms have emerged regarding the pace and transparency of the implementation, with only a fraction of the intended beneficiaries currently receiving support. Critics argue that the pace needs acceleration and a comprehensive database should be established to effectively address the widespread economic challenges exacerbated by the fuel subsidy removal.

In a legal dispute between Apple, the tech giant, and Masimo, a medical monitoring technology company, Apple has lodged an appeal on Tuesday contesting the ruling that prohibits the import of specific Apple Watches. This decision came after President Biden opted not to veto the tribunal’s verdict.

The ban was initiated based on a complaint lodged by Masimo, accusing Apple of infringing upon its pulse oximetry technology.

Masimo accused Apple of illicitly integrating Masimo’s pulse oximetry technology into its coveted Apple Watch series, notably the Series 6, utilizing mechanisms for blood-oxygen-level assessments three years ago. Masimo contends that Apple engaged in talent poaching and misappropriation of its technology, igniting a fierce legal feud that has captured industry attention.

The ban, imposed by the U.S. International Trade Commission (ITC), serves as a hurdle obstructing the import and sales of Apple Watches employing this contested technology.

Despite Apple’s fervent plea to suspend the ban during the appeals process, the ITC dismissed the request, compelling Apple to swiftly challenge the decision before the U.S. Court of Appeals for the Federal Circuit.

“We vehemently oppose the USITC decision and the resulting exclusion order,” said an Apple spokesperson in a statement to CNBC, noting the company’s urgent efforts to expedite the return of affected Apple Watch models to American consumers.

However, the ban’s ripple effects extend beyond Apple’s sales sphere, dealing a blow to its wearables, home, and accessory division, which raked in $8.28 billion in revenue during the third quarter of 2023.

In response to Apple’s move, Masimo, the aggrieved party in this legal skirmish, has remained tight-lipped, refraining from commenting on Apple’s appeal and the subsequent developments.

While the embargo lingers, the U.S. Customs and Border Protection gears up to deliver a verdict by Jan. 12 on whether revamped iterations of Apple Watches violate Masimo’s patents. Apple stands poised, awaiting this crucial decision, aiming to alleviate the ban’s impact and resume sales of the affected watch models.

This legal saga pinpoints a growing trend of intellectual property disputes in the US tech industry – now including healthcare. The outcome of Apple’s appeal and the impending customs ruling are expected to wield significant influence, potentially reshaping the availability of these Apple Watch models in the U.S. market.

The ban does not impact the Apple Watch SE, a more affordable model, and sales of this particular version will persist. Additionally, previously sold watches are not subject to the ban and remain unaffected by these developments.

This standoff between Apple and Masimo echoes past patent disputes within the tech industry, notably reminiscent of the 2013 reversal of an import embargo on Apple’s products in a patent altercation with Samsung during the tenure of President Barack Obama’s administration.

In February, the Biden administration decided against vetoing an independent import ban on Apple Watches, which was established due to a patent-infringement complaint filed by medical technology company AliveCor, per CNBC. However, the ban imposed by the ITC has been suspended for other reasons.

Amidst this protracted legal wrangle, the fate of Apple’s Series 9 and Ultra 2 watches remains uncertain, leaving consumers and industry stakeholders on edge.

Apple is now asking a federal court to overturn a sales ban on two models of its popular smartwatches. The company was forced to stop selling its Apple Watch Series 9 and Ultra 2 in the U.S. after a federal trade agency found that Apple infringed on two patents for a blood-oxygen sensor held by Masimo. On Tuesday, the White House ultimately decided against reversing the sales ban. The stakes are high, since the Apple Watch — driven largely by sales of the Series 9 and Ultra 2 — accounts for about $17 billion in revenue. Apple’s Vision Pro mixed-reality headset is expected to be launched in retail stores in late January or February, analysts and insiders say. (LinkedIn News)