The National Information Technology Development Agency (NITDA) said it has launched an investigation into the activities of online banks, particularly loan providers, for alleged breaches of customer privacy and data.
Because Nigerian banks prefer to lend to businesses and not individuals, new companies have filled the void by offering quick loans through smartphone apps. Startups like Carbon, Branch, and Fairmoney started out as simple app-based money lenders before their recent transition into digital banks that offer other services.
In November 2021, NITDA said it had received 40 petitions from the public about companies abusing user data. In August, it fined 10 million naira ($24,000) on Soko Lending Company, owner of sokoloan – an app launched in September 2018 that has over 1 million downloads on Google Play Store.
NITDA, Nigeria’s de facto technology regulator, says it is concerned about the damage caused by money lenders like sokoloan. This is why it partners with the Federal Board of Competition and Consumer Protection, Nigeria’s consumer protection and antitrust watchdog body, to enforce the right to privacy under the Nigerian Data Protection Regulation. (NDPR) promulgated in 2019.
According to the agency’s Managing Director, Kashifu Inuwa, many Nigerians had recently taken to social media to lament the alleged unethical and dehumanizing behavior of e-commerce platforms that offer short-term loans.