Acorn & Mustad Legal

  Introduction The digital lending industry in Nigeria has grown rapidly in recent years, providing an alternative source of credit for many individuals and small businesses. However, non-payment of loans, also known as non-performing loans (NPL), has been a significant challenge, with Digital Banks like Kuda reporting  NPL rates of 69%   compared to traditional  banks' rates of 4.4% . Recently, regulatory bodies like the Federal Competition and Consumer Protection Commission (FCCPC) have started  cracking down   on harmful debt collection practices such as “naming and shaming”, threatening customers and unlawful data collection employed by a majority of digital lenders in Nigeria. This underscores the need for lenders to adopt compliant recovery alternatives. Thankfully, in 2020, the CBN implemented a framework called Global Standing Instructions (GSI) that allows creditors to directly recover loan amounts from a borrower's bank accounts across participating financial institut