Ban, Google Restriction May Impact Loan App Operations Adversely, Say Watchers
Analysts believe that the recent ban and Google restrictions on loan apps’ ability to access customers’ data will have a significant impact on digital lending platforms that rely on accessing customers’ contacts and photos to determine creditworthiness and recover loans.
As reported on Independent, the affected platforms will now have to explore alternative ways of assessing credit risk and collecting loans.
However, it is important to balance this with the need to provide access to credit for underserved populations and promote competition in the digital lending market.
On 6th April 2023, the Nigerian Government banned digital loan apps from accessing the contacts and photos of their customers.
This move comes just a few days after the Federal Government of Nigeria licensed 117 digital loan apps to serve Nigerians and concerns were raised over the privacy and security of customers’ data. The new policy will come into effect on May 31.
Google will prohibit apps from accessing sensitive user data such as photos, videos, contacts, precise location data, and call logs.
Analysts believe that the ban will have a significant impact on digital lending platforms that rely on accessing customers’ contacts and photos to determine creditworthiness and recover loans.
The affected platforms will now have to explore alternative ways of assessing credit risk and collecting loans.
However, it is important to balance this with the need to provide access to credit for underserved populations and promote competition in the digital lending market.
