 Now, the FCC-PC said Google's new policy to ban loan apps from accessing user contact and photos is one of the success stories of the commission's partnership with Google as it continues to sanitize the digital lending space in Nigeria. However, Ngwazi Dosei, the co-founder of Cabin, one of the licensed digital lenders in Nigeria, said denied loan apps access to their customers' contact and photos will affect the business negatively. Now, Samson, a keen tarot tech analyst at Mirometrics, joins me now on this discussion. Thanks for joining me, Samson. Thank you for having me. Good morning. It is indeed my pleasure. First off, now, how do you react to this tight end regulations of Google by cutting off access to sensitive data, including users' contact, photos, and location? Yeah, thank you. I think it's a good development because there has been a lot of abuses. You know, these loan apps, they have been abusing the contact, the assets that they have to their customers' data, which is the contact and the photo. You've seen situations where someone just sent you a random message on WhatsApp and saying, so, so, person is your friend, is going, and you have to please help us compare this person to O. In fact, you'll be surprised. Probably somebody you've not even spoken to in years. And then they'll put the person's picture as well. So, and this is because before you can borrow from these loan apps, you have to give them the permission to assess your contact, to assess your photos. So, and I think they are using these as, as you may be aware, most of these loans are without collateral. So, they are using these assets as a collateral. So, and there has been a lot of abuses. There have been a lot of abuses here and there. So, I think banning them from assessing this is a good development. And to help the FGCPs in what they are trying to do in sanitizing the industry. All right. Now, Sam said, to operate as a personal loan app in Nigeria, it is mandatory for digital money lenders to comply with their limited interim regulatory and registration framework and guidelines for digital lending now of 2022 set by the Federal Competition and Consumer Protection. Do you see this development as Hekulian Awards and the FCCPC is asking and now what Google is also saying? Yeah, I think what the FCCPC is asking is the simple thing. They are saying, come, show us your business. Let us know who you are and then let us come and register with us. Give us your address. Tell us, let's know how you operate your business. You know, before now, a lot of these loan apps have been operating. Anybody can just wake up one day and then create an app and start giving out loans. Of course, I know some of them are registered by the CBN, but a lot of them are not registered and then because due to lack of regulation or lack of registration, you see a situation where anybody can just wake up one day, design an app, then maybe ask them to change, then say you are a loan app, then you start issuing loans, then and that is where you see the issue of analytical practices. That is where they come in because you are not registered. You are nobody's monitoring you. You can do as you like. You can do anything. You see a situation where you see a loan app displaying an obituary of a customer just because the business has not paid or the business is defaulting. So it is only someone that is not monitored, that is not registered that can do that. So if the FCCC is saying, okay, come, let us know who you are, tell us how you operate, show us your address and all that. So I think it is quite a very simple thing. If you want to be a legal entity, then you should be willing to be regulated. You should be willing to register with the regulator and I think it is also a good development for the genuine digital vendor because it shows that okay, these people that are registered, they are registered by the government and then even the borrowers can also have the rest of them, that okay, this company is registered. So before now, people lumped all of them together, the registered, the unregistered, the illegal ones, the illegal ones. So now people can see, okay, this person I am dealing with is registered. If this person misbehaves, yes, I can complain to FCCC and they can't hold them accountable. So that is what I say. All right now, so something with this recent development now with this regulation or added regulation as it were. So what should borrowers expect now going forward from these loan app operators? Okay, yeah, I think what we are likely going to see now is that if we see, you know, this loan after they pride themselves as providing peak loans, instant loans, so we say on that one hour, you get your loan. But with this new policy, of course, they do that, they were doing that before because they have access to their phone, they have access to their concert, even they may not even do any verification before issuing the loans, but they know that we have a way to track this person. But with this new policy, it means that they are still going to the process, the process of issuing loans to the borrowers will be reduced to be because the companies, the digital vendors, we have to take their time to try and see if this person can pay. Usually through the concert, they try to look at the contact of the person and say, okay, can this person pay? Is that somebody that we can go to this person is owing? But if you are denying them that access now, you will not start to look at, okay, let's find another way to see, maybe let's check, maybe through BVVL, let's see if this person, as I can, or if this person, they have to take their time to verify, maybe this person, is he working? Who is he to identify another? So we are going to see a slower process than before, but I think it's good for everybody, even the borrowers and the digital vendors. Okay, now some experts are saying right now that this recent development will lead to an increase in non-performing loans for lenders. Do you really agree with this appostulation? Yes, yes, that is that is banned to happen, even in banks, the established and traditional banks, you have a lot of non-performing loans and there's every year it keeps increasing, despite the CBN regulation and despite the banks' policy of not giving to people that collateral and all that. But for the digital vendors, we also need to find a way of identifying their customers before releasing the money. Of course, without the access to their contacts, you know, some people, this is Nigeria, even among friends, you have people that want to borrow from you, they'll borrow from you and then you don't have intention of paying back. So, and even for the loan apps, you see a lot of people, Nigerians have also bastardized it because they say, okay, these people are here and then in some cases, you see the loan apps running after people say, come and take loans, come and take loans. Someone that doesn't need the money will take the money, take the loan and then maybe blow it on something that cannot even yield any returns and then at the end of the day, you find out that because it cannot repay. So, we're going to see an increase in non-performing loans for the digital vendors. There's no doubt about that, but I think they will also, at this point, I think what they will need to do, they will also need to reduce the way they run after people, the way they beg people to come and take loans. So, I think that's true, also reduce. Okay, Samson, I'm even concerned really about the process of verifying borrower's identity because all of these options are being done by these loan apps is basically to fulfill all KYC requirements as by knowing their customers and all of that. Are there other preferable alternatives that they can use for KYC measure? Yes, you know, if you ask a borrower to submit NIN or maybe or even through BVN, even it's one sure way that they can use. You know, before now, they don't use our first if it was to pay a bank in, to get all that. But for most of these illegal loan apps, they don't do that. All they know is that once you can give us access to your phone, to your contact, to your pictures, you can't run away. And that is because they already, they know they're ready to blackmail you if you don't pay them. So, but of course, if you have BVN, if someone is not paying, there's a way they can, you know, when you have someone's BVN, you have to deal with the BVN as the entire bar matrix of the person, the picture, the data, everything about the person. And they can also, if you are a legal digital lender, there's a way they can also report a BVN that is going then that is defaulting, that they can, there's a way they can blacklist such BVN, such that the person will not be able to borrow money anywhere even from the traditional bank. So, I think they can, they can always use the BVN to actually identify their customer. All right. But something the main concern right now will be the federal government's financial inclusion policy now. Some loan app operators are saying that the policy will favor banks as in the traditional banks at the expense of fintechs that are driving this financial inclusion that we have been talking about. And they are meeting that some of the loan apps have been abusing access to your customer's data, I get that. But with all of this now, don't you think that it will be favoring the deposit money banks and to the detriment of this fintechs? I don't think so because, you know, if the digital lender to the right thing, of course, they will see how their customers and if you also help them because they will not have genuine people. It's not people that just want to collect money. You know, Nigeria, so if we don't even care, okay, ship is my account, it is my contact that you want. Some will even go and take the loan, buy a new phone, they make sure that okay, the contact that they have, they are even irrelevant contact, so that even when you contact such person, they make sure that even their pictures, they don't have it on their phone. So this, to me, it depends on the way the digital lender handles it. I don't see they can still continue to run their business in a non-ethical way and then it will favor them. I don't see it as benefiting the banks because for the banks, for you to borrow money at the banks, you have to provide which collateral that which meant we couldn't have. And this is one reason why many people are going to the loan apps and people will continue to go to them, genuine people, people that are willing to pay back. With this current situation now, the digital enders will also be very careful about what they give money to and it's also for their own benefit because it's also good for them. So I don't see it as something favoring the banks because not everybody can go to the banks to go and get loans. Not everybody can afford the collateral that the banks demand for. And even the banks are not really looking at all these small, small people to give money to. They are looking at the big businesses, people that can give them huge returns. So that was the banks that, so the retail market, the mass market is still there for the digital enders. So that's my take on it. All right, so as we round off on this session, now let's just talk generally about the fintech sector. Because you will agree with me that it is actually driving the economy this time around. Nigeria is really trying to penetrate so deeply. With all of this regulation, aside from the loan apps, generally speaking now for the fintech ecosystem, do you really think that it is overly regulated in Nigeria, the fintech sector? The fintech sector is just growing. And one thing about technology is that technology is always ahead. Why regulation follows? The regulators are just finding a way to now regulate fintech. The fintech, and then that is normal, that happens in every country. You see people innovate first and then when the innovation has become acceptable and it's addressing the solution, that is when the government will now start looking at, okay, this thing that can be regulated, that can we make sure that they don't misuse it. So I don't think fintech is over-regulated in Nigeria. Of course, we have the CBL regulating the fintech. And now the FCC is doing that for the digital vendors and also for that. So I don't think they are being over-regulated because in a way, everybody is trying to ensure that the regulation, we also ensure that they also survive as a business. And just as you are coming up with innovation, we are also complying with the rules, with the laws of the land. So I think regulation is very, very, very important because you can see with AI now, a lot of people are already calling for regulation of the shantyogen because of the way it's going. They know that if it's not regulated, things may go out of hand because innovation has both its good and bad side. So for you to prevent the bad side, there must be regulation to moderate everything. So I think that was happening in Nigeria. I don't see over-regulation yet. Thank you so much, Emsam, for joining us on Business Insights. Thanks for all of the useful insight that you have brought on this discourse for today. Asa Makinta is the tech expert at NiroMetrics. We do appreciate your time. All right, you're still watching Business Insights on Plus TV Africa. Well, take a quick break. We'll come back and we'll be moving on next to the aviation sector in a moment to join us again.