What is the penalty for operating an illegal loan app?

Penalties vary by country but can include massive fines, prison time, and lifetime bans from operating financial services.

Governments around the world are cracking down hard on illegal lending.

Nigeria – Under the DEON Regulations 2025, illegal lenders face:

• Fines up to ₦100 million (approximately $220,000 USD) or 1% of annual turnover, whichever is higher
• Directors can be disqualified for up to 5 years
• Individual fines up to ₦50 million
• App delisting from Google Play Store
• Suspension or revocation of approval to operate

Kenya – Operating without a CBK license is a criminal offence. The High Court has also ruled that interest cannot exceed principal for any lender, including digital lenders.

Philippines – The PAOCC works with the PNP-CIDG, SEC, and NTC to investigate and prosecute illegal lending. Operators can face criminal charges, with potential prison time. The government has already banned 27 administrators and 89 online scam loan pages .

India – Law enforcement can press charges for extortion, data theft, and cyberharassment. Some cases have led to arrests of operators .

United States – Google's policy bans apps with APR above 36% . Violators can have their developer accounts terminated.

Step-by-Step Action If You Encounter an Illegal App

Step 1: Do not borrow from the app. If you already have, stop paying.

Step 2: Document everything – screenshots, permissions requested, repayment terms.

Step 3: Report to authorities:

• Nigeria: FCCPC (fccpc.gov.ng)
• India: RBI or cybercrime.gov.in
• Philippines: SEC or PAOCC
• Kenya: CBK or DCI

Step 4: Report to Google Play Store. Google has a reporting mechanism for policy violations.

Step 5: Warn others. Share the app name on social media and with friends.