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The Lagos State Government through its Ministry of Home Affairs says it will review the law on Money Lending in the state.
The Commissioner for Home Affairs, Olanrewaju Elegushi, made this known on Friday during a Stakeholders’ Forum with Money Lenders in Lagos State in Ikeja.
Elegushi said there was the need for a review as the laws guiding the operations of the lenders were obsolete.
He said: “You will all agree with me that some of the laws guiding our operations require total overhauling, while others have become obsolete and archaic.
“We should therefore feel free to make our inputs and suggestions as these will help us as we approach the State House of Assembly for a more robust and all encompassing amendment on the laws on money lending in Lagos State.
“It is our expectation that the laws will have a friendly approach to the government, practitioners and the beneficiaries who constitute the larger picture of our society.”
The Commissioner said there was the need for the ministry to have a befitting law and control the money lenders, bearing in mind the great role money lending plays in the micro-economy of the state.
He said: “As regulators, we cannot be a judge in our own case.
“This is why we have called on all of you practitioners and would-be practitioners to look at the laws guiding our activities, discuss and agree on grey areas as they affect both regulators and practitioners in the state.
“Our outcome from here today should eventually lead to creation of jobs, generate wealth, alleviate poverty and widen the tax nets in order to make small scale businesses grow and encourage entrepreneurship.
“The Governor is expecting that the outcome of this meeting will come up with a position that will ensure enabling environment for easy loan accessibility to citizens with an emphasis on pragmatic strategies for achieving positive and cost effective results in grassroots financing.
“This will invariably help in achieving the ‘Making Lagos a 21st Century Economy’ goal or the T.H.E.M.E.S. Agenda of this administration a reality.”
Olubunmi Fatinikun, Director, Ministry of Home Affairs, said the vision of Lagos State was to become Africa’s model mega city and global economic and financial hub.
Fatinikun said there was huge formality associated with banks and microfinance banks pertaining to borrowing, and this had created a gray market for lending business.
She said this clearly necessitated the need for financial intermediation and assistance by majority of the operators of the informal sectors of the economy, particularly the small scale entrepreneurs.
According to her, small scale entrepreneurs need small amounts of money to sustain their day to day survival.
She said: “It became necessary for successive administrations in the state to saddle the Ministry of Home Affairs with the responsibility of issuing money lender’s license to applicants.
“It has also embarked on the drafting of a new law which will regulate, monitor, supervise, enforce and license money lender’s activities in the state and other connected matters.
“There is no gainsaying the fact that money lenders have impacted the growth of Lagos State economy.
“Nevertheless, the state is to provide an enabling environment for all players in the money lending business for sustainable business and hitch-free operations.
“Most of the time, there have been issues which have led to litigation and many questions have been asked, some dubious operators have gone to the extent of scamming unsuspecting borrowers, leveraging on lack of instruments from appropriate authorities to escape from the long arms of the law.
“This and other incidences led to the need for government to advice that all money lenders in the state should obtain valid licence from the Ministry of Home Affairs for smooth and legal operation of their businesses.
“On the part of the borrower, patronising a licensed money lender will definitely save such persons from quacks who take undue advantage of the desperate need of the borrower by charging exorbitant interests and in case of slight delay in payment of money lent, forecloses on the property of the unfortunate borrower.”
The Director said that for investors, actions could be brought against such money lender and in the advent of establishing financial crime on the part of the money lender, the Lagos State Government should revoke the license of the lender.
She said that government would refuse to issue such operator any future licence and would also bring the full weight of the law upon offenders.
David Setonji, Chairman, Lagos State House of Assembly Committee on Home Affairs, said he would champion the relevant regulation to ensure the smooth operation of money lending in the assembly.
“I want to assure you that you have the backing of the Lagos State House of Assembly in what you are doing,” Setonji said.