• App owners given May 31 as deadline
• FCCPC commends move

Relief has come the way of borrowers in Nigeria and other countries as Google has introduced a new policy that bans loan apps from accessing photos and contacts of users.

The policy according to Google, is expected to take effect from May 31, 2023.

It is targeted at addressing the rising privacy breaches and loopholes usually employed by loan sharks to invade customers’ privacy.

Loan apps, exploring the credit gap, are known for harassing Nigerian borrowers on their platforms, sending defaming messages to their contacts and exposing confidential data to third-party harvested from their contact list.

Recall that as part of the sanity targeted on the sub-sector, the Federal Competition and Consumer Protection Commission (FCCPC) had recently registered 170 loan apps out of the 200 operating in the country.

Google, in its April 2023 policy updates, said the new policy would provide respite for loan app users in Nigeria and other places where crude loan retrieval methods have become the norm.

The updated policy prohibits personal loan apps from accessing user contacts or photos. The policy also introduces additional requirements for personal loan apps targeting users in Pakistan, including the submission of country-specific licensing documentation to prove their ability to provide or facilitate personal loans.

The new policy follows Google’s recent announcement of updates to its Developer Programme Policy. This update mandates digital money lenders in Nigeria, India, Indonesia, the Philippines and Kenya to conform to regulatory rules or face removal from the Play Store.

On this, digital money lenders in Nigeria are expected to adhere to and complete the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022 and obtain a verifiable approval letter from the FCCPC to be allowed on the Play Store in Nigeria.

The Chief Executive Officer of the FCCPC, Babatunde Irukera, commended Google’s institutionalisation of the regulatory policy, stating that it is a welcome development and consistent with the commission’s position as a regulator.

Irukera had earlier noted that registration does not mean all the registered companies are law-abiding, but that the process will significantly reduce how they violate the law. According to him, with the information provided by the registered companies, the commission can easily trace them and hold them accountable should they violate any law.

While Google’s policy stated 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 adhere to it.

Google said the loan apps must also provide all the necessary information about their interest rates, repayment plans, applicable charges on the Play Store to guide users.

Google pointed out that personal loan consumers require information about the quality, features, fees, repayment schedule, risks and benefits of loan products to make informed decisions about whether to undertake the loan.

Commenting on the development, a telecoms expert, Kehinde Aluko, described the move as strategic and timely, going by what some Nigerians have suffered at the hands of loan sharks.

Aluko said millions of Nigerians, who lack bank accounts or security to borrow turn to these lenders for loans starting from as low as N2,000. In turn, they experience character assassination, cyberbullying, physical abuse, public shaming, and extortion among others from these loan sharks.

“They are known for their aggressive recovery methods; the lenders charge interest as high as 45 per cent per annum. Applicants download an app, fill a form and are asked to allow the lender access to their contacts for risk management purposes. They have strict terms of collection upon failure, including sending threatening, shaming and defamatory messages to the customer and their phone contact list and generally operating outside the law,” he stated.

According to him, government should make a policy that enables easy loan collection from banks to the general public, who do not have a salary account.