It is imperative to note that Fintech lending houses are completely legal. Although there is no specific legislation regulating the sector, most of the legislations are subsidiary laws/guidelines made by the Central Bank of Nigeria, being Nigeria’s apex institution in financial matters and money lending laws of different states. In Nigeria, to engage in marketplace lending, such an entity must be registered either as a Bank, or Other Financial Institution by the Banks and Other Financial Institutions Act, 2004 (BOFIA). The Central Bank of Nigeria has also issued a guideline for companies wishing to carry on money lending business. Such companies may be licensed by the Central Bank of Nigeria, as a Finance Company under the Revised Guidelines for Finance Companies in Nigeria. In addition to this, there is the Moneylender Law of each state of the Federation and the Federal Capital Territory, which an entity must comply with to carry on business in the state it wishes to operate from. Unlike the license given by the Central Bank of Nigeria, entities registered within a state must comply with the interest rates of that state and other restrictions. The import of this brief analysis on the regulation of Fintech loan companies, is to accentuate the fact that there are regulations that govern this type of online financial transaction, hence it should be safe, legal and consumer-friendly.
Despite these regulatory frameworks/protection, consumers of these services have not been protected. This is as a result of the fact that although there are regulations in place, many of these online financial houses are either not registered or not properly licensed, or there is no proper check on their activities online.
In addition to the foregoing, it is impossible to divorce Fintech loan companies from Data protection laws. This is because, by the very nature of online lending, the only way to trace or track consumers will be by their data. It is because of this that the Nigeria Data Protection Regulation, 2019, places an obligation on digital lenders as Data Controllers to disclose what data is being processed, the specific purpose of processing the data, and obtain the consent of the Data Subjects to process the data. The Data Subject must also be informed of his right and the ability to withdraw his consent at any time.
If there are regulations that govern digital lending, then we must ask the question, the purposes of this paper, why then does it seem that some digital lenders bully their customers and seem to get away with it?