Key highlights
- The co-founder of Carbon said denying loan apps access to their customers’ contacts and photos will affect the business negatively.
- He is also of the view that the policy will favor banks at the expense of fintech that are driving financial inclusion.
- He, however, admitted that some of the loan apps have been abusing access to their customers’ data.
Ngozi Dozie, the co-founder of Carbon, one of the licensed digital lenders in Nigeria, has said that the new Google policy banning loan apps from accessing their customers’ contacts and photos will hurt the lenders.
In a blog published Tuesday, he explained that even though the policy was well intended, it could stifle innovation and impede the efforts of fintech at driving financial inclusion. According to him, the policy puts fintech startups at a disadvantage to the benefit of the ‘Big Banks’.
No level playing field
While noting that there is no difference between the lending apps and all other banking apps, Dozie said:
- “Why the different treatments? The distinction between lending apps and digital banking apps is disingenuous; a bank, which Carbon is, by default lends. Therefore, all banking apps are by default lending apps, broadly speaking.
- “There is a grave danger that what started as a positive action will stifle innovation and hurt the smaller companies that are doing God’s work in financial inclusion. What’s worse is that there is already an uneven playing field between the fintech Davids and the Big Bank Goliaths.”
Abuse of access by loan apps
Dozie, however, admitted that some loan apps have been abusing the access to their customers’ contacts and photos, which necessitated the policy from Google. According to him, before now, Google has been responding to the abuse by progressively restricting access to personal data on the phone – along with Apple.
- “Certainly in some emerging markets including Nigeria, I suspect the abuse of this data by many lending apps acted as a main driver. It works like this:
- “Customer downloads lending app to borrow money; a precondition for the loan is providing access to their contacts and photos. If the customer defaults on a loan then to shame the customer to repay, the lender sends some or all the contacts of the borrower message.
- “Clearly, this practice is abusive and goes against all privacy laws; Google is right to reduce the invasion of privacy. But in implementing this policy with not enough nuance, Google is cutting the legs off from some of the more innovative companies that are doing the Lord’s work, like Carbon,” he said.
Although Dozie issued a caveat that the blog post represents his personal opinion and not the position of Carbon, he said the lending company has no option but to comply with Google’s directive as the platform remains its main source of customer acquisition.
In case you missed it
Google over the weekend introduced a new policy banning loan apps from accessing photos and contacts of users. According to Google, this policy takes effect from May 31, 2023.
This policy is in addition to earlier issued requirements for loan apps in Nigeria, which mandated them to submit an approval document from the Federal Competition and Consumer Protection Commission (FCCPC).
The FCCPC said new Google’s policy to ban loan apps from accessing user contacts, 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.
It’s well development, because they go into their customers contact to call and blackmailing people follows several insulting, abused and go to the extent of cursing the person family members, even with the high principal & overdue interest; that will later be paid in full. Thanks for the rescue attempt for the Nigeria citizen
The Google policy is NOT restricted to Nigeria alone but is worldwide, because the abuse of private information happens in many countries.
Furthermore, Mr. Dozie does not appear to offer any legitimate lending reason why loan (of even bank) apps should have access to debtors’ contacts or photos.
However, Nigerian borrowers should cultivate the culture of REPAYMENT of loans, because of you repay your loan as agreed, you won’t be ‘harassed’.
Unfortunately, way too many Nigerians take loans (even borrow money from friends) with NO intention (or realistic expectation) of repaying same.
@Joseph Monday,thanks for your view. The way and manner the online loan App insult and tagged their customers has send may to early grave….
I believe we all have our integrity and stand to responsibility per time. In a situation where by the customer was not meeting up on the due date and the reason was communicated I think such customer should be treated with some respect….
But then,that is the beginning of that customer problem with them until you pay back . I had if a man owing 70k but couldn’t meet the due date for his payment,this people has contacted all his contact and tagged him all manners of names few day after the man committed suicide. I think the policy is a good one to curb most of these online loan App ..
To even make it worst after charging high interest on loan given they will still harrased the customer . So my question is if the customer later pay the loan will they go back to the customer’s contact to informed them the money has been paid oooo which the answer is NO.
Is a welcome development
Will this also affect the customers already using the loan apps?
Very welcome development. These loan apps are greedy. They offer loans for 3 days at 75 percent interest. On your due date they text your contacts calling you a pedophile because you didn’t pay by 9am. Very good move and they are not doing the Lord’s work in anyway.
Why charge 70% interest on a loan you know the borrower is desperate because he has some pressing problems like paying hospital bills? After he has solved the problem and he is unable to pay in time because he couldn’t, you start harassing his family members. This is bad. I have been a victim of this cruelty.