More Nigerian companies are losing money every day as a result of cyberbullying, threats, and harassment from online money lenders, often known as loan sharks. This comes after Google, a technology corporation, implemented a new policy prohibiting loan sharks from accessing customers’ images and contacts. The policy will go into force on May 31, 2023, according to the corporation.
With the economy in shambles and government regulatory bodies failing to exercise their supervisory roles in Nigeria’s technology domain, illegal internet lenders have capitalized on this void to grow a sizable portion of the retail loan industry, only to use this advantage to blackmail borrowers. According to a recent report seen by the Daily Sun, due to economic hardship, Nigerians saw online loan sharks as a source of relief for money to feed, which the lenders exploited by offering seemingly cheap credit to impoverished citizens, ostensibly under less-than-stringent, tempting conditions, some of which defy the basic canons of lending.
According to the research, “in actuality, both the pricing of the loans, which lack complete disclosure, and the lenient terms and conditions are all ruses to dupe unwary recipients into taking the bait.” Finally, victims realize too late the full degree of their burden when payback begins.”
Subsequent analysis found that credit firms bare their teeth in the case of a default. According to recent films obtained by the Daily Sun, these online loan sharks have used verbal abuse and cyber-bullying to great effect on defaulters, their relatives and friends on their phone contacts.
“In late 2022, I had a business failure and I required roughly N2 million to resuscitate my electronic firm, so a friend of mine connected me to one of these online lending applications,” said Daniel Nnamdi, a businessman who talked to Daily Sun. Once the loan was approved, I was assigned a repayment date. They contacted me the day before the loan was due to be repaid to remind me that I promised to repay the debt. That’s what I did the next day. Suddenly, a business acquaintance on my wife’s contact list contacted to express her condolences for her loss. My wife was taken aback and inquired as to why. He then sent her a message via the internet app stating that I had died. I had no idea they had communicated this to my other partners. That was the worst day of my life since I had lost a contract that I was seeking. I phoned them angrily to ask them to delete the notice, but they argued that I had defaulted on the day I was meant to return the debt.”
Olivia Ngozi, who also shared her experience, said she was repeatedly intimidated by app lenders after failing to pay her loan on time.
“I told them that the bank app I was using was having problems. I thought they were fair until they informed folks on my contact list that I was HIV positive. I was surprised since most of the folks I conducted business with began avoiding me at the market. “To avoid additional embarrassment, I had to borrow money from a close friend to pay them back,” she explained.
The Federal Competition and Consumer Protection Commission (FCCPC) recently registered 170 lending applications out of the 200 already functioning in the country. According to Chiazor Victor, Head of Research at FSL Securities, “While not all applications are unlawful, the majority are bogus.” Some people are still following these debtors illegally. I’ve seen footage of these people roughhousing debtors. This is insufficient and sends the incorrect message to investors who may choose to invest in the nation.
The solution is for the government to implement short, medium, and long-term policies to relieve poverty, support SMEs and start-ups, and keep inflation and interest rates in check.”
