Loan App owners speak as FG restrains digital banks from accessing customers' photos, contacts

The Co-founder of Carbon, Ngozi Dozie, has said that the new Policy by Google restraining loan apps from accessing customers’ contacts and photos will harm digital lenders.

Dozie said in a blog post published on Tuesday, April 11, 2023, despite the good intention of the policy, it could cripple innovation and restrict the efforts of fintech firms from driving financial inclusion, putting them at a disadvantage to the benefit of the big banks.

He stated that loan apps are treated differently and unfairly despite the similarity in operations by the banks.

He 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 doing God’s work in financial inclusion. Worse, there is already an uneven playing field between the fintech Davids and the Big Bank Goliaths.”

The Carbon boss said that some loan apps had abused access to customers’ contacts and photos, necessitating the Google policy. He said Google had responded proactively to the abuse by restricting access to personal data on the phone and Apple.

He said: “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.

FCCPC lists over 200 loan apps on Google Store The development came as the Nigerian government said it would enforce the latest policy by Google, stating that the step aligns with the Nigerian government's move to curb the invasion of customers' privacy by loan apps and other digital lenders.

The Nigerian government recently made critical decisions to tackle customers' privacy violations by loan apps.

The Federal Competition and Consumer Protection Commission (FCCPC) recently released the list of 173 registered loan apps out of the more than 200 operating in Nigeria.

Google said in its April 2023 policy update that the new update would provide relief for loan app users in the country and other places bombarded with crude methods and rights violations by loan apps.

Google said: "Policy preview (effective May 31, 2023): This article previews changes included in our April 2023 policy updates.

"We are updating our personal loans policy to state that apps aiming to provide or facilitate personal loans may not access user contacts or photos.

"We are introducing additional requirements for personal loan apps targeting users in Pakistan. Personal loan apps in Pakistan must submit country-specific licensing documentation to prove their ability to provide or facilitate personal loans."

Punch reports that the new policy comes after the search engine giant announced its developer programme policy updates. It requires digital money banks and lenders in Nigeria, India, Indonesia, the Philippines, and Kenya to abide by its regulatory rules or be removed by January 31, 2023.

The tech giant said that only digital lenders that have adhered to and completed the Limited Interim Regulatory/Registration Framework and Guidelines Lending of 2022 by the FCCPC and obtained a verifiable approval letter from the Commission would be allowed on the Play Store in Nigeria.

The Chief Executive Officer of the FCCPC, Babatunde Irukera, stated that it was a good development, showing that Google was entrenching its regulatory policy in Nigeria and elsewhere.