Nigerians continue to patronise loan apps despite crude ways of fund recovery

NIGERIANS from all walks of life have continued to patronise loan apps despite their unconventional ways of recovering their money.

These loan apps act as platforms where you can get quick loans with no collateral other than providing a bank verification number (BVN) and a request to allow pictures and contacts on a potential customer’s phone.

*Yemisi (not her real name), a resident of Ojo, Lagos, told The ICIR in a chat that despite being warned by friends and relatives about the risk of borrowing money from the Loan Apps, she still went ahead.


“I was warned by several people to avoid the Loan Apps, but I still went in. They almost killed me; I nearly died; they sent horrible messages to all my contacts. At one point, they told my contacts I was a fraudster. Please, I don’t even want to remember,” she said.

Yemisi not only took a loan and regretted it but also introduced one of her friends, Mummy Wura, to the loan facility.

Mummy Wura, in a chat with The ICIR, said she got a loan from CreditAll, and it’s a miracle she is alive to tell the story.

“At a point, I develop high blood pressure. They will call me every day in the morning, afternoon and night, threatening me, even though I promised to pay them in due time.

“They gave me a loan of N60,000; I was expected to pay N80,000 within a month. I defaulted for two days, and I saw hell,” the mother of two said.

According to her, she also borrowed from Carbon Loan App, which claimed they paid money into her account, but she did not see the money. 

More victims of the loan app shaming strategy narrate their experiences.

Another victim, Precious, narrates her experience to The ICIR in a chat.

“My name is Precious. I got a phone from Easybuy; I bought the phone on credit. During my payment, I was opportune to apply for a loan.

“So, early this year, January to be precise, I collected another loan.

“The plans I had in paying up the loan were aborted. So, I had to start struggling to pay up.

“I got a series of calls and messages from them that I was a fraud. 

“It’s Newedge; Palm credit that gives out loans in Easybuy. So, I got a lot of messages from them, threatening messages.

Precious said she made them understand that she had no intention of defrauding the company. However, they kept sending her threatening messages and reported her to her guarantor.

“I was able to make a payment of N10,000; part payment. After 4-5 days, one of the workers sent another threatening message. I couldn’t bear it,” she said.

Israel, a teacher and resident of Mowe in Ogun State, while speaking on his experience, said he is already frustrated by their actions.

“I requested to borrow N109,000 loan from LCredit, but they gave me N150 thousand to pay within 13 days with interest.

“I paid N120,000 after two days overdue and promised to pay the balance by month end, and they added almost N12,000 as interest.

“They keep calling me and threatening me with all manner of messages,” Israel said.

Using loan to pay off loan

In her contribution, Eberechi Mercy from Enugu state complained about the attitude of the digital lenders.

“I applied for the SparkCredit loan. They approved and gave me N63,000; they said that I will pay back N96 thousand. As I was applying, I saw 180 days after I finished applying; I now saw that it’s seven days, but they have already approved the loan.

“My friend told me she will help me remove the names of my contacts, but I will pay her N15,000. I told her I didn’t have such money, that the money I needed in school was N165,000.  She said I should pay from the money I borrowed and borrow another one and that she would help me clear both of them, so I borrowed that from Diamond Credit.

“I paid her the N15,000, and she helped me to remove my contacts; at this point, she said I should pay an extra N5000 to remove my emergency number. I paid N5000; at this point, I was already frustrated. I almost went into prostitution.

“I intend to pay back, but the time duration is what I can’t meet. The last time I checked, the N63k has become N110,000, and the last one is already N120,00 due to their interest rate,” she said.

Tales like these and more abound in Public spaces. 

The process of getting a loan

In Nigeria, potential borrowers who use internet applications to apply for loans download the app, enter their financial information, and wait for the algorithm to produce a credit score.

A Bank Verification Number (BVN) and a phone number linked to the BVN are typically required by apps.

Sometimes, a simple SMS, dialling a short code or a phone call can get a customer registered on these Apps.

Tactics employed by loan apps to recover a loan

According to a loan app customer Efe Kingsley who claimed he has never been harassed, some people actually borrow without a plan to pay back. “That is one of the reasons why some loan apps employ harsh and crude strategies to recover their money,” he said.

Screenshot of a message sent to a customer by a loan app
Screenshot of a message sent to a customer by a loan app

In an attempt to recover loans, users may be prohibited from borrowing from one loan provider due to past-due loans.

Online loan fintech companies sometimes send WhatsApp and text messages to every contact on their customer’s phones, claiming they are debtors and fraudsters.

Sometimes they use threatening messages like, “Pay our money, or we shall report you to all your contacts”, ” Last warning: Pay up, or we lock you up,” ‘You have nowhere to run to; we are monitoring you,” Etc.

Intermittent threatening phone calls are also part of their strategies.

The loan apps also send messages to the contacts on the phone of their defaulters, describing them in degrading manners, like claiming they are dead, fraudulent or have HIV.

“They sent a message to my employer that I have HIV, that I might infect my colleagues,” a customer said.

Threat message sent to a customer by a loan app company
Threat message sent to a customer by a loan app company

Another method they (Loan Apps) use is by placing “obituary” posters of a defaulting customer at strategic places.

“They printed an obituary flier with my name, claiming I was dead and pasted it on my street. I was shocked and almost died,” another customer said.

The ICIR has done a detailed report on  how illegal loan apps ignore Nigeria’s cyber laws, and continue to shame customers; read it HERE.

Loan applicants vow not to repay

Loan apps are mostly unregulated in Nigeria, and debt collectors use creative methods to punish defaulting borrowers into repaying their debts.

Online advocacy groups and loan firm victims have devised ways to stop calls, alleged intimidation, and harassment by loan app debt collection agents because, according to them, regulatory agencies have not yet taken any action.

Defamation victims of illegal loan apps have formed groups on Facebook under the names “Loan Apps Victims Initiatives,” “Mobile Loan Apps Debt Victims in Nigeria,” and “Say No To Illegal Loan Apps.”

Sample of message sent to contacts and loved ones of defaulting customers
Sample of a message sent to contacts and loved ones of defaulting customers

Victims joined the  Mobile Loan Apps Debts Victims in Nigeria, a private Facebook group to help one another and bully debt collectors who pester them with calls and messages.

“I made up my mind after their constant threat that I was not going to pay back the loan, after so much trouble and embarrassment they caused me.

“I destroyed my two Sims I have been using for years and severed all contact with them,” Yemisi said.

The ICIR has earlier done a detailed report, “Illegal loan apps ‘victims’ form groups to seek retribution, vow not to repay’ read it HERE

Operating loan apps

Any individual intending to operate a financial company in Nigeria other than insurance and stockbroking must apply in writing for a licence to the Central Bank of Nigeria (CBN) in accordance with Section 58 of the Banks and Other Financial Institutions Act (BOFIA).

The Central Bank of Nigeria’s (CBN) Consumer Protection Regulation forbids financial institutions from contacting a loan defaulter’s friends, employers, or family members without that person’s permission. Yet, the operators of the loan apps have repeatedly flouted this rule.

For a money-lending firm or financial company to legally operate in Nigeria, it must obtain a CBN license from the Central Bank of Nigeria. However, The ICIR investigation discovered that several loan firms in the country violate the rules and regulations of the apex bank.

Google has also established a policy to remove illegal loan apps from the Play Store in Nigeria, effective January 31, 2023.

The updated Google policy guidelines outline the requirements for lending apps in Nigeria, Kenya, India, the Philippines, and Indonesia.

According to Google, all lending apps must obtain a licence from Google in order to function in the Play Store. Google announced it in an official post.

In addition, loan apps in Nigeria must possess approval documents from the Federal Competition and Consumer Protection Commission (FCCPC) or risk withdrawal from the platform.

Penalised for compromise of data

As a result of numerous complaints, on August 17, the Nigerian online lending platform Soko Lending Company was fined $10 million by the National Information and Technology Development Agency (NITDA) for violating users’ privacy.

The actions of several loan apps violate Article 2.2 of the Nigerian Data Privacy Regulation (NDPR), which prohibits the illicit sharing of data with third parties without a legal justification.

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

FCCPC intervention

The FCCPC has taken several steps to control the activities and excesses of illegal loan apps.


Screenshot of the regulatory framework
Screenshot of the regulatory framework

The ICIR, in a report in 2022, looked at the ways the Independent Corrupt Practices Commission (ICPC), the National Information Technology Development Agency (NITDA), and the FCCPC joined forces to bring criminal charges against illicit loan applications, sometimes known as “loan sharks,”

In a chat with The ICIR on Thursday, March 23, 2023, the spokesperson for FCCPC, Ondaje Ijagwu, said the Commission is doing a lot in that industry.

The Director General of the FCCPC, Babatunde Irukera.
The Director General of the FCCPC, Babatunde Irukera.

Ijagwu said the FCCPC have carried out intermittent raids on the premises of Digital lenders to control and restrict their activities.

“We visited different outlets within Lagos; we got to know their whereabouts and made arrests.

“What we did was in conjunction with other agencies like the ICPC, NITDA and CBN.

“We came up with an Interim Regulations/Registration framework for Digital Lending. It is a body of guidelines. This is pending the introduction of a substantial regulation,” he said.

He said this interim regulation framework has helped to register loan apps to monitor their activities properly.

“As we speak this morning, 99 of those Digital Lenders are registered on our website. Those who have been registered have a code of conduct. I am not sure they can involve in any shady deal.

“One of the major advantage of this registration is that unlike before, we know theirbase,we know people behind these operations, we know the principalactors, we have their contacts and locations. Those ones cannot involve in anything shady.”

Ijagwu urged Nigerians to familiarise themselves with the list of Digital lenders that are registered with the Commission.

On the area of debtors that have refused to pay back money borrowed, Ijagwu said, “We have a joint task force with ICPC, NITDA and CBN. We review cases from time to time. Issues like these are for the joint team to review.”

He asked Nigerians who have complaints against any Loan App operator to send a mail to [email protected]

Despite the attitude of some loan apps, why do people still patronise them?

Previous investigations by The ICIR show how illicit lending applications disobey Nigeria’s internet laws and humiliate borrowers for not repaying loans on time and trap customers in debt.

They threaten borrowers and use derogatory language while employing aggressive debt-collection practices. However, despite all these, Nigerians still rush to loan app platforms to borrow money. 

In her contribution, the Lead Psychologist at The Sunshine Series, Aisha Bubah, said the primary reason people patronise Loan Money Apps could be due to economic bases.

“A major reason could be that times are hard and people are struggling 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.

    She advised those currently traumatised due to the activities of digital money lenders to seek better alternative ways to pay off and stay off these loan apps no matter how juicy their offers seem.

    “Seek, counselling if you have the means to. In the FCT, you can call 112 to speak to a counsellor for free, with no credit charges,” she added.

    A reporter with the ICIR
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    1. Omo na them sabi, everyone know say the country hard, but for these loaners they’re evil. God forbid. Like this eh, I no dey pay shishii 😒😏. Rubbish people😂😋.if you are still worried about them or what they will do to you if you’re owing them, sorry oooo 😂🤣na u sabi, that’s to your own detriment. Do not mind whatever messages or threats they send to you on daily basis. Most of those loaners are fast killers, crooks, life hunters and real time scammers. Like this eh……. Am owing about…. of them😌, but I no dey pay shishii 😒 it’s over a year and some months now since overdue and none of them were able to call or send messages to my contacts and post my pictures anywhere. They are even tired of calling me😌😏.Dem dey crase. If you wish to know how to deny them access and how to clear your contacts and data from their server send me a DM on WhatsApp @09151977310. But if you’re one of their agents and you disguise into my DM, let me not swear for you and your smartphone shaa 😏. Nonsense people.

    2. I’m still in this situation now, I almost kill myself because of this loan app issue, they sent so many threatening messages every days , they called my mom that they will carry my dead body to her if I didn’t pay back the loan my mom become sick because of that, first I was forced to be borrowing from one app to pay another and the interest is joining together before I can see the debts I’m into is so much and I decided I will not borrow from one to pay one again till now the threatening continue calling all the number in my contacts list ,I’m sick am tired of it I can’t even think straight again sometimes I will be crying

    3. I am currently a victim of Joycash loan app they are fraudsters i needed a quick 20k to fix up some emergency the interest displayed was small and the 1 month payment plan after disbursement the whole place at first was a lie and a trick to lure you in. instead of 20000 they gave me 18450 to pay an interest of almost the amount collected so i rejected the load and reversed it back to their account 10mins after they disbursed i didn’t make you of their money so i don’t know why they will be disturbing me calling and texting me that am owning them. this people need to be stopped alot of Nigerians are going through this embarrassment. if they are place the interest they placed after disbursement i would have paid my loan without them even contacting me. immediately i say the interest they place i quickly returned it.


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