• Loan apps still operating without CBN license
• Clients sent loans despite not applying
• Economic bases reason people patronise loan apps – Psychologist

Despite unconventional methods loan firms deploy to collect their money, the country’s economic crisis is forcing Nigerians to use loan apps to get immediate emergency cash. The ICIR’s Shehu Olayinka examines stories of Nigerians who had terrible experiences with loan companies.

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DOLAPO’s dad had received a call from a Henloan marketing agent, promising loans and affordable interest. After pondering for a while and being pushed by his financial crisis, he opted for the loan. Going for the loan remains one of his worst decisions in life as subsequent events unfolded.

“My dad, Jide Wale, borrowed money from other apps, but Henloan made life a hell for him. His mood changed as they constantly called and harassed him.”, Dolapo told The ICIR.

She said her father wanted to take a loan of N65,000. However, after downloading the app and inputting his details, he saw more interest than what the company’s agent had told him. He cancelled the request and deleted the app.

But despite not going ahead with the loan request, Dolapo said a few minutes later, her father got an alert of N25,000 to pay N55,000, which to him was too much interest for a N25,000 loan he did not request.

He was desperate to return the money and immediately called the Henloan representative who introduced the app. To his shock, he was told to return the money in full: pay the N55,000.

“They were calling daily and threatening to send messages to all his contacts, which they later carried out,” She told this newspaper. “My sister and I were constantly harassed and sent messages accusing my dad of being a criminal and ritualist.”

The messages sent to Dolapo’s father are part of strategies for loan apps in Nigeria deployed to force defaulters to repay.

The tactics are sometimes used to tarnish a defaulter’s image.

But Dolapo said her dad was not a defaulter as he didn’t request the loan. He had earlier accessed loans from Quick Credit, Cash Express and Cash Credit.

“The harsh economy may have pushed my dad to borrow from loan apps. But the outcome wasn’t palatable for my family. Though the constant messages and calls have stopped, they embarrassed us,” she said.

“I have told him to stop borrowing from loan app companies. That moment was difficult for us. Now, I try as much as possible to support him with what little I have.”

Dolapo’s family experience at the hands of Henloan is not uncommon. Many Nigerians who defaulted on loans experience harassment and cyberbullying by loan app operators despite efforts by the Federal Competition & Consumer Protection Commission (FCCPC) and Nigeria Data Protection Commission- NDPC to clamp down on the use of crude tactics to recover loans.

In April, the Nigerian government, through the FCCPC, banned unethical and illegal activities by lending apps, including accessing debtors’ contact lists. It also prohibited loan apps from accessing contacts and images of their customers.

It also approved 173 digital lending applications to operate in the country. The commission gave conditional authorisations to 54 loan applications, while 119 got full approvals.

Clients of some loan apps also told The ICIR that they received loans despite not applying.

There is limited information about Henloan online. However, The ICIR discovered that Henloan also uses the name Hencredit, which is operated by Orange Loans and Purple Credit Limited. They also have the same email address listed for inquiries, as seen here.

There is also limited information for Quick Cash online. The ICIR effort to speak with a Quick Cash agent named Bode, who contacted Dolapo’s family, was rebuffed. Bode declined to comment and insulted the reporter after he was told of the cyberbullying claim against him and Quick Cash.

The other loan company that harassed Dolapo’s family was Quick Credit.

The ICIR found two loan companies using the name Quick Credit.

One of the loan companies, Quick Credit company, is owned and operated by Quick Credit Nigeria Limited.

Quick Credit Nigeria Limited is registered on the CAC database with registration number RC 1496778, identified as active by the commission, and registered as a General Contract and Merchandise company.

Two persons with significant control, Olapade Murtala Ayodele and Ejodame Odia Osewele, listed as Shareholder and Director, respectively, found on CAC and NGCheckers, were sent emails on the activities of Quick Credit.

In response to the enquiry, Ayodele denied Quick Credit engages in cyberbullying, stating that the organisation had been non-operational in the last 18 months due to an ongoing restructuring.

The second Quick Credit loan company was also sent a message in an email found on its Facebook page.

The ICIR called a phone number on the Facebook page, to which a female staff responded but declined to provide information about the organisation’s operation. She said the organisation would respond to the email sent by this reporter, but as of the time of filing this report, no response was received.

‘They said I have AIDs, and I’m a whore’

It’s a good initiative that such platforms exist, said *Bimbo (not real name), but according to her, using crude tactics when issues arise between a loan app and a customer would leave anyone regretting borrowing the money.

The ICIR reporter found Bimbo on a Telegram public channel, “Say No to Loan Sharks”, with 584 subscribers.

The group was observed to serve as a communication channel where Nigerians who have been at the receiving end of loan apps use crude tactics to fight back — and some have even claimed to be able to defraud lenders. The Telegram Channel also has a Facebook group.

This newspaper found more than five such groups on Facebook. [Say no to Sokoloan & Loan sharks, Say no to Sokoloan, Say no to Soko loan and LCredit ETC, Say No to loan app, Mobile loan apps debt victims in Nigeria, Say no to loan sharks, Illegal/fraudulent loan apps victims.]

Bimbo had posted on the page, looking for help dealing with the harassment and cyberbullying from agents of loan apps. After failing to make a timely repayment, Bimbo said she was hounded and defamed and had to turn off her phone to escape the abuse.

Bimbo, currently job hunting, said she took a combined loan of N180,000 from Fundy and Flypay loan apps.

“I had no option. I was broke and needed the money to offset some bills. But that was a big mistake, as those guys made my life a living hell,” she said.

She also disclosed that loan apps are increasingly reaching out to Nigerians through marketing agents to explain the advantages of obtaining loans through their apps.

She stated that before users download the apps, agents fail to disclose the actual interest rate on the loan.

“It’s good that people have something to rely on financially. But the interest rate and the whole cursing and defamation are upsetting and wrong. They also have this habit of saying (on the dashboard, they’d show you, e.g. 54k to pay 58k) when you click on the receive money. They could disburse 33k to pay 58k in 7 days. And sometimes? You don’t have to apply; they will send it to your account as soon as you download their app and input your bank and BVN details into their app.”

“When I couldn’t pay back in time, they started harassing me and sending messages to my contacts. They said I had HIV/AIDs, that I was a prostitute who slept with men for between N800 and N5,000, and that my parents molested me as a kid. All were sent to all my contacts; it was the same day my loan was due.”

Bimbo told this reporter that she intended to repay her debt once she could, but as of the time of filing this report, she had not done so.

“Clients getting loans without applying”

A recovery agent with Camelloan, whose identity is being withheld because he was not authorised to speak, confirmed to The ICIR that marketing agents of some loan apps fail to disclose the actual interest rate on loans to users they call or message.

He also said the culture at loan companies is for workers to either meet their target or get sacked if they fail.

“We are always given targets. We are only doing this to survive. It is not as if we enjoy doing all this. Calling people regularly, but we need to work and feed our family. I have seen people get hired and sacked in a month because they couldn’t meet the target. And the salary is not that much, but we are doing it for survivors. You know the country is hard,” the agent said.

The source also admitted to having had clients complain about receiving loans without applying.

“I don’t understand how that works. But I have heard people complain that they didn’t apply for loans before being sent the money. We have complained to our managers and told them this doesn’t seem right, but they appear not to care about it.

The source said he wasn’t sure if the app was faulty, adding that the practice could be intentional.

Another source, who works as a marketing agent with Camelloan, admitted to the loan app companies sending money to people despite not applying.

“It’s a problem we face. Some complain about not applying for the loans sent to their accounts.”

A borrower, Eseosa Godfrey, whom Camelloan agent contacted first via text, described how he was tricked into taking a loan by a marketing representative of Camelloan named Paul but backed out when he realised the agent had misled him about the interest rate.

Godfrey said despite not seeking one, he received a short-term loan of N6,000 to be paid in seven days and experienced harassment and defamation after failing to repay the debt in full with interest.

“I was deceived. When the Camelloan marketing agent called me, he didn’t tell me the true interest on their loans. He told me it was not 10 per cent. He deceived me into downloading their app for a business loan, and after downloading and inputting my bank and BVN details, I saw what he told me was a lie. I cancelled. Later, I got an alert of N6,000 to pay N12,000 without my approval from my end, which I refused to pay,” he said.

Godfrey shared with The ICIR a message showing a 10 per cent interest rate on every loan.

He said he called the marketing agent to explain what had happened, that he hadn’t applied for the loan and wouldn’t be paying back with the said interest the loan was showing on the app.

“The agent only said okay and dropped the call. I paid back the N6,000 to the Camelloan bank account, but immediately after I paid, an agent named John called and threatened to send messages to my contacts if I didn’t pay back in full.”

Geoffrey said the agent, true to his words, sent messages to his contacts, describing him as an internet fraudster.

Another borrower, Olayinka Lekan, said in an email to The ICIR that a marketing agent from Camelloan had gotten in touch with him and informed him that he had access to N50,000 and N100,000 with a loan interest rate of 10 per cent for a three-month term.

Lekan said the agent sent a link to his WhatsApp number, which he clicked, downloaded, and installed the app.

“Immediately, I downloaded the app from the Google Play Store and inputted my details. What the Camelloan representative told me differed from what I saw on their app. The low interest based on his promise was the only reason I consented to download the app, but I saw on their app that Camelloan charged more than 40% interest on its loans.

Lekan also said he called the marketing agent who had sent him the link, informed her that she had lied about the actual interest, and told her he was no longer interested. At this point, he had already entered his bank and BVN information on the app.

He disclosed that he got an alert on his account of N6,000 the next day from Camelloan.

According to him, “What I discovered startled me when I logged into the app. I was to pay back N11,050 due on July 7. Rather, instead of paying that amount, I decided to pay N8,000 rather than the N11,050 I saw on the app to be paid back because of what the marketing agent had told me”.

Lekan further said a Camelloan agent called and asked him why he had paid N8,000 instead of the amount displayed on the app, and when he refused to pay the additional amount on the due date, the agent sent him threatening messages.

Another victim, Ronke Okun, a student at one of the universities in Southwest Nigeria, had a similar experience.

She had always borrowed from other loan companies, but not Camelloan.

She told this reporter she was credited N6,000 despite not applying for a loan.

According to her, an agent of Camelloan called her to apply for a business loan. After downloading and entering her details, she discovered that the loan limit was N6,000 and had an N5,000 interest.

Ronke said she immediately closed the app but received an alert of N6,000 loan that she didn’t apply for and was to pay N11,000 in seven days.

She further said the effort to get Camelloan to resolve the issue proved abortive. Her pleas were ignored, and she was harassed and hounded by agents.

Ronke was later able to settle her issues with Camelloan two days after her due date after an agent called her to return the N6,000 that was paid into her account. But that happened after the loan firm had sent messages to her contacts.

Another loan app Ronke claimed defamed her is Deloan.

She had borrowed N5,000 and was to pay back N8,730 to offset bills in school.

She added that she returned the N5000 and begged for a few hours to pay the remaining N3,730, but a female Deloan agent denied her beg and threatened to send messages to her contact, which the agent eventually did by claiming she had passed away.

The ICIR contacted Precious, the Camelloan representative Lekan said spoke to him about collecting loans on their app. After explaining why the call was initiated, Precious told this reporter to wait while she talked to her manager. A few seconds later, the Manager spoke to this reporter through Precious’ phone and introduced himself as Bassey.

Bassey promised to call back a few hours after this reporter introduced himself and explained why he had phoned, but he never did. Two hours later, calls to Precious’ phone numbers were not answered.

A WhatsApp message was sent to Precious, but as of the time of filing this report, she had yet to reply despite the message being marked as delivered and read by the recipient.

Paul, who introduced Camelloan to Godffrey, said he only worked as a marketer and was not the one who harassed and defamed him.

He declined to comment when asked why he didn’t tell Geoffrey the actual interest on a loan.

When asked if Camelloan was sending loans to those who didn’t request, Paul said he has had customers complain about it but wasn’t sure why the app was sending loans to people who did not apply for loans and claimed there might be an issue with the app.

Paul promised to get an answer from his bosses, but subsequent calls to his phone were unanswered.

John, the debt collector Geoffrey claimed had harassed and slandered him, rejected the allegation and stated that Geoffrey’s file was no longer on his desk and that he would not be able to speak about him.

Another borrower, a student who only wanted to be recognised by her first name, Kemi, said CashDoor and Camelloan made her life a living hell. She explained that she had accessed and paid back loans several times on other apps with no issues but opted for CashDoor and Camelloan when the agents promised a lower interest.

“I didn’t apply for the loan they sent. When I downloaded the app, I saw that their interest was high. I decided against going ahead to get a loan from them. But they credited my account and wanted me to pay N11,000 for a N6,000 loan.

“I offered to pay back what they sent, but they declined and have been harassing and threatening me. And the loan keeps increasing because I refuse to pay the 11,000. They kept saying they would destroy my life and post my obituary picture. I couldn’t leave my house for one week because they kept threatening and harassing me and my contacts”, she added.

Kemi has still not paid back the loan as of the time of filing this report.

She further said her experience with Camelloan was the same as she experienced with the Cashoor loan app.

The ICIR contacted an agent with Cashdoor loan app who only wanted to be recognised by Dora.

Justifying using crude tactics for loan recovery, she said the tactics were always the last option whenever borrowers defaulted, “We are not at fault here. The crude tactics users always talk about only occur when borrowers ignore us. We do that to them when they are unwilling to pay us back.”

The ICIR also made an effort to get in touch with a Cashbus loan app agent. After introducing himself and outlining his reason for calling, the agent launched into a tirade and threatened to deal with the reporter.

Despite the cyberbullying and defaming that comes with loan apps, Nigerians are still collecting loans from app operators. In recent years, Nigeria has been plagued by protracted inflation, significant public debt, the COVID-19 pandemic, and a food crisis that has ravaged its agricultural industry. While unemployment and poverty have fluctuated, data from the NBS shows that inflation rose from 3.16 per cent in 2011 to 11.61 per cent in May 2018 and 24.08 per cent in July 2023.

The World Bank, in its Nigeria Development Update in 2022 and 2023, disclosed that increasing inflation drove at least nine million Nigerians into poverty within two years.

The NBS, in 2022, stated that 133 million Nigerians were multi-dimensionally poor, representing 63 per cent of the Nigerian population.

These economic hardships have caused an increase in the demand for soft loans, which come with high interest rates and short repayment periods. As collateral, the apps ask for financial details and access to read private data such as users’ location, media files and photographs, and contacts. Adverts for quick loans often flood social media platforms, blogs, and bus stops.

Loan companies still operating without proper regulation in Nigeria

There are 720 microfinance banks and 105 finance companies licensed by the Central Bank of Nigeria (CBN) to engage in financial services, a list last updated on August 28, 2023.

Nearly 200 companies operate in Nigeria’s fintech industry, ranging from digital loans to platforms for remittances and transfers.

Except for stockbroking and insurance, any business providing financial services must have a license from the CBN to operate.

Some of the loan apps mentioned in this report, Camelloan, Cashbus, HenCredit or Henloan, LifePurse, Quick Credit, Quick Cash, Flypay, Loan Me, Deloan, CashExpress and Cashdoor, were not listed on microfinance banks and finance companies licensed by the CBN.

These companies enjoy little or no oversight from the regulatory agencies; as such, they prey on Nigerians.

The ICIR had reported the unethical practices of some loan apps.

In 2021, the National Information and Technology Development Agency (NITDA) fined Soko Lending Company N10 million for sending threatening messages to borrowers, which constitutes a privacy invasion.

Everyone interviewed for this report said they were asked to pay back in seven days. This action breaches Google PlayStore’s updated rules for an app to be listed on its platform.

The Google Play Store’s guidelines state that financial apps that offer short-term loans on their network must give borrowers a minimum of 60 days from the date of issue to repay any loans.

It was also found that several lending apps that the FCCPC had prohibited and removed from the Google Playstore and Apply Playstore for breaking its rules would use the Android Package Kits (APK) file format to get around the restriction and keep operating in Nigeria.

These loan companies profit by charging excessive interest rates and shame and cyberbullying their customers.

The ICIR raised these questions in an email sent to some of the loan apps’ parent companies, such as Orange Loans and Purple Credit Limited, BetterLending, Quick Cash Nigeria Limited, and Phoenix Payment Solution Limited, to reveal their interest rates, loan terms and why they are breaching Nigerian financial regulations.

Orange Loans and Purple Credit Limited, with an address in Lagos, was registered on 1 July 2020 as a private company limited by shares to carry on the business of E-Commerce, Funding and Lending solution with an ordinary share of 1,000,000.

A Chinese Hong Kong-registered firm, Fench Inda International Group Limited, with registration number 2170465, operates Orange Loans and Purple Credit Limited, which has the largest share at 990,000.

Orange Loans and Purple Credit Limited, with registration 1681557, operates four loan apps in Nigeria: Camelloan, Henloan/ HenCredit, Loan Me and LifePurse. Camelloan, alongside another loan app, Getloan were recently delisted and banned from Google Playstore and outed by the FCCPC for improper operation in Nigeria.

The Commission said the violating digital money lenders (DMLs) resorted to using Android Package Kits (APK) file formats, providing links to consumers to visit unregistered websites using their Android devices/phones.

Marvin Omorogbe, a legal practitioner licensed to practice law in Nigeria, is listed as an active Secretary in Orange Loans and Purple Credit Limited CAC status document with an address in Abuja.

Responding to an enquiry by The ICIR, he said he ceased to serve as the Company Secretary in January 2021. 

Lawyers behind loan apps

Omorogbe said he stepped down as the company Secretary after the company appointed a new secretary and had had no relationship with the company since then.

Charles Edosomwan, also listed as active in the company CAC document, said he had divested his interest in the company and had no information on the current management.

The company also has Osokolo Keneth Kema listed as Director with addresses in Ikosi, Ketu Lagos and Oyelowo Oluwaseye Ibitoye as the company Secretary.

The ICIR also sent an email to Salawu Yetunde and Anjorin Sunday, who are listed as people with significant control in Phoenix Payment Solution Limited, owner of Cashdoor on CAC.

They have both not responded as of the time of filing this report.

Another company contacted is BetterLending, owner of Flypay with CAC registration number 1755066.

BetterLending is managed by Flowcred Limited with 20,000,000 ordinary shares.

Anuoluwapo Olopade, with an address in Lagos, is listed as the organisation’s lawyer.

An enquiry email was also sent to Pavestone Legal, a law firm listed on the company CAC status report.

A representative of Pavestone Legal Quasim Ogunjimi, in response to the inquiry on Flypay harassing clients said BetterLending, the owner of Flypay (Flypay Pro-instant Loan), was a reputable money-lending organisation and would not condone the use of illegal and/or unethical debt recovery practices.

His response contradicts findings made on the activities of Flypay.

He also told The ICIR that the nature of the company’s operations does not require obtaining a CBN license. Ogunjimi’s response contrasts what Nigeria Fintech Laws and Regulations 2022 says on Fintech operations in Nigeria.

The law states that Fintech companies offering financial services to Nigerian consumers must obtain the appropriate licences and comply with CBN’s applicable guidelines.

The ICIR also sent messages to Kou Yan, a Chinese national and Ovakporaye Onome, listed as Directors.

Quick Credit Limited, not on the CBN list, told this reporter that it was registered with the Association of Non-bank Microfinance Institutions of Nigeria (AMFIN).

ANMFIN is a Network of independent microfinance institutions in Nigeria, an initiative led by CBN.

He also said its organisation had a money lending licence and was processing its FCCPC approval.

For *Ifeanyi (not real name), the loan companies help in terms of emergencies, but the tactics they deployed in retrieving their loans are unreasonable and crude.

Obike, just like Bimbo, this reporter met him on the Telegram Public channel, “Say No to Loan Sharks.”

He said, “Most times, people collect these loans for emergency purposes. Thus, they are okay with the interest rate. While some do pay back, banking network issues delay it from reflecting on the app. Also, some default and still pay the default fee.”

On how he fights back when they start issuing threats to pay back, he said, “All I do, and most others do, is to report them to the appropriate authorities and hold on to repaying them until issues are resolved between them and the authorities. Also, sometimes I pay them back ‘in their coin’ by not paying them back once my details have been broadcast to my contacts and on social media,” he said.

Efforts to speak with the CEO of FCCPC, Babatunde Irukera, on these findings were unsuccessful, as he was said to be out of town.

However, the Lead Psychologist at The Sunshine Series, Aisha Bubah, in an earlier interview on why people patronise loan apps, said the primary reason could be economic bases.

“A major reason could be that times are hard, and people struggle to make ends meet.

“If you check Maslow’s hierarchy of needs, the first includes basic needs like food, shelter, and security. People can barely get by, and basic needs are a part of human survival. Dignity and all comes later when basic needs have been met,” Aisha stated.

She added that people see the loan apps as the only alternative accessible to them.