More Nigeria businesses are daily losing their hard earned moneies to cyber-bullying, threat and harassment from online money lenders otherwise known as loan sharks. This is coming after Google, a technology company introduced a new policy banning loan sharks from accessing photos and contacts of users. According to the company, the policy will take effect from May 31, 2023.
With the parlous state of the economy and the failure of government regulatory agencies exercise their oversight functions on Nigeria’s technology space, illegal online lenders have cashed in on this lacuna to grow a large segment of the retail lending market, only to use this vantage position to blackmail borrowers. A recent report seen byDaily Sun, stated that due to the hardship in the economy, Nigerians who saw online loan sharks as source of succor for money to feed which the lenders took advantage of by offering seemingly cheap credit to impoverished citizens, ostensibly under less-than-stringent, tempting conditions, some of which defy the basic canons of lending.
The report said, “In reality, both the pricing of the loans that lack full disclosure and the lax terms and conditions are all subterfuges to hoodwink unsuspecting beneficiaries to take the bait. In the end, the victims realise too late, the full extent of their burden when repayment starts”.
Further investigations revealed that in the event of a default, the credit firms bare their fangs. Recent videos seen by Daily Sun showed that these online loan sharks have resulted to deploy verbal assault and cyber-bullying to great effect on the defaulters, their relations and friends on their phone contacts.
Daniel Nnamdi, a businessman, who spoke to Daily Sun, said, “In late 2022, I had a business setback and I needed about N2 million to resuscitate my electronic business and so a friend of mine introduced me to one of these online loan apps. After the loan was granted, I was given a due date to repay the loan. A day before the loan was to be repaid, they called me to remind me that I said I would repay the loan. I did that the day after. All of a sudden, a business associate on the contact list called my wife to commiserate with her loss. My wife was shocked and asked why. He then sent her the message from the online app who said I was dead. I didn’t even know they had sent this to my other partners. That day was the worst day of my life as I lost a contract I was pursuing. Angrily I called them to remove such a message but they insisted that I had defaulted on the day I was supposed to repay the loan”.
Also sharing her experience, Olivia Ngozi, said she was constantly threatened by the app lenders after she failed to pay up her loan on the due date.
“The bank app I was using was having issues which I told them. I felt they were being reasonable until they sent messages to people on my contact list telling them I was HIV positive. I was shocked because most people I did business with started avoiding me in the market. I had to borrow money from a trusted friend to pay them back to avoid further embarrassment”, she said.
It will be recalled that the Federal Competition and Consumer Protection Commission (FCCPC) had recently registered 170 loan apps out of the 200 operating in the country. According to Head of Research at FSL Securities, Chiazor Victor, “Although not all the applications are illegal, the majority are illegitimate. Some are still tracking these debtors illegitimately. I have seen videos where these guys rough handle the debtors. This is not good enough and sends the wrong signal to investors who even want to invest in the country.
The solution to this is for the government to sort of adopt short, medium and long-term policies to alleviate poverty, boost SMEs and start-ups, tame inflation and interest rates”.