Policy Updates: Merchant Onboarding on Fundraising and Digital Money Lending/Consumer Finance Merchants 

As a growing company, we’re always looking for ways to improve our processes, solutions and ecosystem. We’ve made some changes to how we approach onboarding and verification for businesses that use Flutterwave for lending and fundraising in certain countries. These changes come from our engagement with our merchants, partners, regulators and customers; 

Updates on Digital Money Lending/Consumer Finance Merchants 

Here are a few things to note:

What is a digital money lending business? 

This is a business that issues loans to customers, while taking periodic interests until full loan repayment, all via a web platform or a digital app. 

What is the FCCPC? 

The Federal Competition and Consumer Protections Commission (FCCPC), is the apex federal competition regulator in Nigeria. The regulator is responsible for protecting market competition and promoting consumer protection. The regulator focuses on areas where it seems businesses may be taking advantage of consumers. 

The regulator has since developed a body of regulations that will guide the lending industry and we thought our Merchants can benefit from this information.

Here are some updates as a result of this policy: 

1. There will be licensing requirements for Digital Money Lending/Consumer Finance Merchants seeking to operate in Nigeria; 
2. Said licensing requirements will be made available to payment companies before they’re onboarded on their platforms, Flutterwave inclusive;
3. Digital Money Lending/Consumer Finance Merchants currently using payment companies shall provide to their payment companies written approval from FCCPC within 90 (Ninety) days of the Commission’s publication, Flutterwave inclusive
4. In the event that any Digital Money Lending/Consumer Finance merchants does not comply by providing the written approval, Payment companies shall, upon the expiration of the 90 days (Ninety) days, suspend the Digital Money Lending/Consumer Finance Merchant on its gateway, Flutterwave inclusive

As a responsible organization, here’s what we think: 

1. Consumer protection is important to maintain the integrity of the business environment;
2. We always frown at businesses with exploitative models like Ponzi schemes; this will not be an exception;
3. As a regulated and responsible business, we welcome the FCCPC’s directives; and have begun implementation.

Ways to get ahead of the curve

1. Engage proactively with the regulator (FCCPC) to ensure that your business model does not fall within the above category; 
2. Engage with your payment partner to ensure that your services do not fall within the Digital Money Lending/Consumer Finance category and if it does, decide on a way forward; 
3. If you’re building out a Digital Money Lending/Consumer Finance Merchants solution, engage proactively with regulators and your payment partner before shipping the feature/product. 

Updates on Fundraising 

We built out our donations link to enable our customers who would love to raise money for various reasons like financial, health and even social courses to do so, seamlessly. We have even in some instances supported these customers. 

We however take exceptions to political donations and fundraising and will not be processing fundraising meant for political reasons. Before we go further, let’s understand the differences between fundraising for political reasons, as against social, financial and health reasons. 

Difference Between Raising Funding for Political vs Other Reasons 

1. When funding is targeted at significant disruption in government or governance, such that it leads to new or modified leadership or policies, this can qualify as political change. 
2. When funding is targeted at enabling an improvement in society, this is a social reason. 
3. When funding is raised to help a patient get much-needed professional care, this is fundraising for health reasons. 
4. When funding is raised to solve personal or communal financial difficulties, this is fundraising for financial reasons.  

Here’s an example of fundraising for social reasons; in 2021, Joshua Cheptegei set out to raise $476,000 to build an athletics school in Uganda. He used Flutterwave donations link to receive money across the world. We also supported this initiative by extending donations to this social course. Please read more here.

Some updates as a result: 

1. If you’re looking to raise funding for a political course, please you can look for other platforms as we do not currently support it. 
2. If you’re looking to use Flutterwave to raise funding and you’re unsure if it’s for political use, please reach out to hi@flutterwavego.com for clarifications. 

We understand that this policy will affect people of good intentions who typically want to use our platform to enable positive political changes in the society. We also see how this makes their work difficult, but having considered the complexity in allowing our platform to be used for political fundraising (for good and bad actors), we’ve made the decision to enforce our policy to protect our customers and the integrity of our Platform.